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BP’s Q2 Earnings Exceed Expectations; Declares  Dividend Hike & Buybacks
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BP’s Q2 Earnings Exceed Expectations; Declares Dividend Hike & Buybacks

Story Highlights

Riding on sky-high global oil prices, UK energy giant BP posted its highest quarterly profit in 14 years. Investors cheered the 10% hike in dividends and share buybacks.

BP PLC (GB:BP) (BP) reported stronger-than-expected Q2 results, significantly topping both earnings and revenue estimates, driven by robust refining margins and oil trading performance.

Notably, the company reported adjusted earnings of $2.61 per American depositary share (ADS), three times higher than the $0.83 per ADS reported for the prior-year period and significantly higher than analysts’ estimates of $2.13 per ADS.

Concurrent with Q2 earnings, BP announced a 10% hike in its quarterly dividend to $6.006 cents per ordinary share. The dividend is payable on August 12 to shareholders on record as of September 23.

Additionally, the company raised its share buyback plan to $3.5 billion, which will be executed in the third quarter. Notably, this comes over and above the $3.8 billion already repurchased during the first half of the year.

Similarly, revenue climbed a whopping 86% to $67.87 billion compared to the prior-year period and massively outpaced the Street’s estimate of $58.66 billion.

The outstanding revenue growth is attributed to strong refining margins coupled with increased oil trading performance and higher liquids realizations.

Shares of the London-based oil and gas giant gained 1.1% on August 2 to close at $29.36.

BP CEO’s Comments

BP CEO, Bernard Looney, commented, “Our people have continued to work hard throughout the quarter helping to solve the energy trilemma – secure, affordable and lower carbon energy. We do this by providing the oil and gas the world needs today – while at the same time, investing to accelerate the energy transition.”

Wall Street’s Take on BP

The Wall Street community is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on nine Buys and four Holds. The average BP price target of GBp510.54 implies 26.5% upside potential to current levels.

BP Scores a “Perfect 10”

BP scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

Key Takeaway

Oil and gas companies have come under the regulatory scanner facing strong criticism from consumers and lawmakers on posting hefty profits.

However, the energy crisis triggered by the Russian-Ukraine conflict may not subside soon and ensure record performance for the sector at least in the short term.

Disclosure

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