BP beats first-quarter estimates on stronger commodity prices; plans to resume share buybacks

BP beats first-quarter estimates on stronger commodity prices; plans to resume share buybacks [ad_1]

LONDON — British vitality main BP on Tuesday reported better-than-expected earnings for the primary quarter, following a interval of stronger commodity costs and a brighter demand outlook.

It comes as oil and fuel majors search to show to buyers that they’ve gained a extra steady footing amid the continuing coronavirus disaster.

BP’s first-quarter underlying alternative price revenue, used as a proxy for web revenue, got here in at $2.6 billion. That in contrast with a revenue of $115 million within the fourth quarter and $791 million for the primary quarter of 2020.

Analysts had anticipated BP to report first-quarter revenue of $1.4 billion, in accordance to Refinitiv.

The London-based vitality big stated the end result was pushed by “exceptional” fuel advertising and buying and selling efficiency, “significantly” greater oil costs and stronger refining margins.

Net debt fell $5.6 billion to $33.3 billion on the finish of the primary three months of the yr, that means BP hit its goal of lowering web debt to $35 billion. The firm stated it could now retire this purpose, topic to sustaining a robust funding grade credit standing.

Looking forward, BP stated it intends to resume share buybacks at a price of round $500 million within the second quarter.

“Overall, a very strong quarter for the company,” BP CEO Bernard Looney advised CNBC’s “Squawk Box Europe” on Tuesday.

“It has been a year of such uncertainty for the world and for the company. There have been many, many questions, of course, and that’s understandable but I think today’s results really answer many of those questions,” Looney stated.

“It shows that it is possible to do two things at once. It is possible to deliver our shareholders with competitive cash returns and at the same time transition the company to a lower carbon future.”

Shares of BP rose over 2% throughout early morning offers in London. The agency’s share value has climbed greater than 16% year-to-date.

BP logos are seen at a BP petrol and diesel filling station southeast of London on June 15, 2020.

BEN STANSALL | AFP | Getty Images

The oil and fuel business was despatched right into a tailspin final yr because the Covid-19 pandemic coincided with a historic demand shock, plunging commodity costs, evaporating earnings, unprecedented write-downs and tens of 1000’s of job cuts.

BP reported its first full-year web loss in a decade in 2020 as the worldwide well being disaster took a heavy toll on its enterprise operations, with Looney describing the 12-month interval because the “toughest” of his profession.

Gulf of Mexico funds

‘Lingering considerations’

BP had beforehand warned of a tricky begin to 2021, with widespread journey restrictions nonetheless in place, but it surely had urged the rollout of Covid vaccines ought to assist to enhance investor sentiment.

Oil costs have climbed round 25% for the reason that begin of the yr, supported by the rollout of Covid vaccines and an enhancing financial outlook.

Fuel costs on an indication at a BP fuel station in Louisville, Kentucky, on Friday, Jan. 29, 2021.

Luke Sharrett | Bloomberg | Getty Images

More lately, hovering Covid infections in India and an anticipated provide enhance from producer group OPEC+ have added downward strain to oil costs.

International benchmark Brent crude futures traded at $66.01 a barrel on Tuesday morning, up round 0.5% for the session, whereas U.S. West Texas Intermediate futures stood at $62.29, greater than 0.6% greater.

Earlier this month, the International Energy Agency upgraded its oil demand forecast for 2021, saying market fundamentals appeared “decidedly stronger” compared with April final yr.

The Paris-based vitality company tempered its optimism for the yr forward, nonetheless, warning that “lingering concerns” persist over the power of the demand restoration.

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