- Profit lifted by strong trading
- BP to purchase $1.75 bln of shares
- Shares lower on slowing buyback
According to Reuters article published on May 2, 2023, BP (BP.L) made a profit of $5 billion in the first quarter of 2023, up from the previous three months on the back of strong oil and gas trading, but the company's shares fell as it slowed a share buyback programme.
BP's results, which beat forecasts, follow a strong showing from rivals including Exxon Mobil (XOM.N) and Chevron last week as oil majors continue to benefit from energy prices that remain strong despite some softening since the start of the year.
BP's shares, however, had fallen around 4.5% by 0735 GMT - compared with a drop of around 1.2% for an index of European oil companies (.SXEP) - after it said it would repurchase $1.75 billion worth of shares over the next three months, down from $2.75 billion in the previous three.
First-quarter underlying replacement cost profit, the company's definition of net income, reached $4.96 billion, up from $4.8 billion in the fourth quarter of 2022 and above expectations of $4.3 billion in a company-provided survey of analysts.
The profit reflects "an exceptional gas marketing and trading result, a lower level of refinery turnaround activity and a very strong oil trading result", BP said, noting the partial offset from lower oil and gas prices and refining margins.
BP had reported a $6.25 billion profit in the first quarter of 2022.
The lower share buyback "will more than offset the good operational performance as BP is the first international oil company...to cut buybacks this quarter," Jefferies analysts said in a note.
BP repurchased $11.7 billion of shares in 2022 and the $1.75 billion indicated on Tuesday still means the company will exceeded its goal of using 60% of surplus cash for the purpose.
Its dividend remained unchanged at 6.61 cents per share after a 10% increase in February. BP had previously halved its payout in the wake of the pandemic.
WEAKER DIESEL
The London-based company said it expects oil and European gas prices to remain strong in the second quarter even as refining profit margins are expected to weaken due to lower diesel prices.
BP shares have outperformed in the sector so far this year, up 10% compared to a 6% rise for Exxon and a 3% gain for Shell.
Benchmark Brent crude oil prices averaged $81 per barrel in the first three months of the year, down 16% from a year earlier and 7% from the fourth-quarter.
BP's profit hit a record $28 billion in 2022 on soaring energy prices and market volatility which benefited its large trading business.
