BP Posts RC Profit In Q3, Underlying RC Profit Beats View; Lifts FY22 Production Forecast

(RTTNews) - British energy major BP Plc reported Tuesday a replacement cost or RC profit in its third quarter, compared to a loss last year, on strong growth in sales revenue. Underlying RC profit beat market estimates.

Further, the company announced $2.5 billion share buyback, which is intended to be executed prior to announcing its fourth-quarter results. bp said it continues to expect to deliver share buybacks of around $4.0 billion per annum and have capacity for an annual increase in the dividend per ordinary share of around 4 percent through 2025.

Looking ahead, bp expects fourth-quarter 2022 upstream production on a reported basis to be slightly lower compared with the third-quarter 2022, primarily in gas regions.

For fiscal 2022, bp now expects reported upstream production to be slightly higher compared with 2021 despite the absence of production from Russia incorporated joint ventures. On an underlying basis, the company expects upstream production to be higher.

Bp previously expected fiscal 2022 upstream production to be broadly flat despite the absence of production from Russia incorporated joint ventures. On an underlying basis, upstream production was expected to be slightly higher.

In the fourth quarter, bp expects oil prices to remain elevated due to the recent OPEC+ supply cut reducing supply amid ongoing uncertainty associated with Russian oil exports. Global gas prices would remain elevated and volatile during the quarter due to a lack of supply to Europe with the outlook heavily dependent on Russian pipeline flows or other supply disruptions.

Further, industry refining margins will also remain elevated due to sanctioning of Russian crude and product and energy prices are also expected to remain high.

In the third quarter, RC profit was $23 million, compared to last year's loss of $2.93 billion. RC profit before interest and tax was $5.48 billion, compared to prior year's loss of $307 million.

Underlying RC profit was $8.15 billion, compared to $3.32 billion a year ago.

Underlying RC profit per ordinary share grew to 43.15 cents from 16.48 cents last year. Underlying RC profit per ADS was $2.59, up from $0.99 last year.

On average, 10 analysts polled by Thomson Reuters expected earnings of $1.94 per share for the quarter. Analysts' estimates typically exclude special items.

Loss attributable to bp shareholders in the third quarter was $2.16 billion, compared with a loss of $2.54 billion in the same period of 2021.

The latest quarterly results included an adverse pre-tax impact of $8.3 billion, compared to last year's adverse pre-tax impact of $6.4 billion.

Sales and other operating revenues surged to $55.01 billion from last year's $36.17 billion. Analysts estimated revenues of $58.63 billion for the quarter.

In gas & low carbon energy segment, production was 981 mboe/d, 10.4 percent higher than last year. Underlying production grew 4.7 percent.

In oil production & operations, production was 1,317mboe/d, broadly flat with the prior year. Underlying production increased 2.4 percent.

In London, BP shares were trading at 481.20 pence, up 0.29 percent. In pre-market activity on the NYSE, bp shares were trading at $33.15, down 0.4 percent.

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