BP launches cost-cutting scheme despite beating profit expectations
Adjusted profits came to $2.4 billion (€2.1bn) for the three months through June, beating analyst forecasts of $1.8bn (€1.6bn). BP also announced a $750 million (€650mn) share buyback.
Despite the better-than-expected results, the firm added that it would be launching a cost-cutting scheme when its new chair joins in September.
This comes just a few months after BP said it would save $4bn to $5bn (€3.5bn to €4.3bn) by the end of 2027, relative to 2023 costs. On Tuesday, the firm said that it had so far delivered around $1.7bn (€1.5bn) of structural cost reductions and sold $3bn (€2.6bn) of assets.
'Underlying earnings in our customers business are up around 50% compared to a year ago and trading has delivered well quarter-on-quarter during challenging conditions,' said BP CEO Murray Auchincloss in an earnings statement on Tuesday.
'This has been another strong quarter for BP operationally and strategically,' he continued.
New chairman Albert Manifold will replace former chair Helge Lund this year as the company cuts back on green spending and renews its focus on oil and gas. Lund was a pivotal figure in BP's sustainability transition, a push that has been scaled back due to pressure from investors such as Elliott Management.
The firm said in February that it would increase oil and gas spending by about 20% to $10bn (€8.7bn) a year, while cutting renewable investment by around 70%.
BP shares rose just over 2% on Tuesday in London, as of around 11.00 CEST.
'Having already teased these quarterly results last month, the reaction to BP beating expectations is understandably fairly muted,' said AJ Bell investment director Russ Mould.
'However, as the company looks to bat off pressure from activist shareholder Elliott and convince the wider market on its recent shift in strategy, updates like today's are helpful for management credibility.'
BP's commitment to fossil fuels was strengthened when the company also announced on Monday that it had made its largest oil and gas discovery in 25 years in a field off the coast of Brazil.
BP said it had found a roughly 500-metre area of oil and gas at the Bumerangue field in the Santos basin, about 400km from Rio de Janeiro.
'BP delivered its first positive quarter in a very long time,' Maurizio Carulli, global energy analyst at Quilter Cheviot, commented on BP's earnings. 'What is perhaps most encouraging is that this is despite the average Brent oil price in the quarter being at $68 per barrel, well below the average of $76 per barrel seen in the first quarter of the year.'
'The management team has clearly started delivering on the strategy reset announced a few months ago,' Carulli added.
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France 24
5 days ago
- France 24
Oil giant BP surprises with better than expected earnings
The British group's return to profit in the second quarter contrasted with weaker results from energy rivals, as lower exceptional charges offset falling oil prices. Profit after tax came in at $1.63 billion in the April-June period, compared with a net loss of $129 million in the second quarter of 2024, BP said in an earnings statement. Stripping out exceptional items, underlying net profit was down nearly 15 percent. "This has been another strong quarter for BP operationally and strategically," chief executive Murray Auchincloss said in the earnings statement. BP on Monday said it made its biggest oil and gas discovery in 25 years off the coast of Brazil. In February, BP launched a major pivot back to its more profitable oil and gas business, shelving its once industry-leading targets on reducing carbon emissions and slashing clean energy investment. However, energy prices have come under pressure in recent months on concerns that US President Donald Trump's tariffs will hurt economic growth, while OPEC+ nations have produced more oil. BP managed to post a profit for the second quarter thanks to impairments which were lower than one year earlier, along with a revaluation of assets -- notably in relation to liquefied natural gas (LNG) -- and divestments. Sector woes By contrast, US rivals ExxonMobil and Chevron, along with French group TotalEnergies, posted heavy falls to their net profits in the second quarter. As did oil giant Saudi Aramco, which on Tuesday announced its 10th straight drop in quarterly profits as a slump in prices hit revenues. The average price for Brent North Sea crude, the international benchmark, stood at $67.9 per barrel in the second quarter, down from $85 one year earlier. British rival Shell still managed to post a slight increase to its profit after tax for the latest reporting period. As for BP, Auchincloss said the company was launching "a further cost review and, whilst we will not compromise on safety, we are doing this with a view to being best in class in our industry". Shares in BP gained 2.2 percent in London morning deals following its results and news of a fresh dividend and share buyback. "A slick turnaround plan pumped up BP's second-quarter results," noted Derren Nathan, head of equity research at Hargreaves Lansdown. "Despite lower oil and gas prices, it's managed to push underlying profits up by nearly $1 billion from the first quarter to $2.4 billion, well ahead of analyst forecasts." Nathan added that "shareholders will be glad to see this matched with financial discipline". BP already announced plans this year to cut cleaner energy investment by more than $5 billion annually and offload assets worth a total of $20 billion by 2027. It recently agreed to sell its onshore wind energy business in the United States, while Shell has also scaled back its climate objectives. BP last month named Albert Manifold as its new chairman, replacing Helge Lund, whose departure was announced amid the strategy reset. The group's net profit plunged 70 percent in its first quarter, hit by weaker oil prices. © 2025 AFP
Euronews
5 days ago
- Euronews
BP launches cost-cutting scheme despite beating profit expectations
BP surprised investors on Tuesday by reporting stronger-than-expected profits in the second quarter, following a period of price volatility. Adjusted profits came to $2.4 billion (€2.1bn) for the three months through June, beating analyst forecasts of $1.8bn (€1.6bn). BP also announced a $750 million (€650mn) share buyback. Despite the better-than-expected results, the firm added that it would be launching a cost-cutting scheme when its new chair joins in September. This comes just a few months after BP said it would save $4bn to $5bn (€3.5bn to €4.3bn) by the end of 2027, relative to 2023 costs. On Tuesday, the firm said that it had so far delivered around $1.7bn (€1.5bn) of structural cost reductions and sold $3bn (€2.6bn) of assets. 'Underlying earnings in our customers business are up around 50% compared to a year ago and trading has delivered well quarter-on-quarter during challenging conditions,' said BP CEO Murray Auchincloss in an earnings statement on Tuesday. 'This has been another strong quarter for BP operationally and strategically,' he continued. New chairman Albert Manifold will replace former chair Helge Lund this year as the company cuts back on green spending and renews its focus on oil and gas. Lund was a pivotal figure in BP's sustainability transition, a push that has been scaled back due to pressure from investors such as Elliott Management. The firm said in February that it would increase oil and gas spending by about 20% to $10bn (€8.7bn) a year, while cutting renewable investment by around 70%. BP shares rose just over 2% on Tuesday in London, as of around 11.00 CEST. 'Having already teased these quarterly results last month, the reaction to BP beating expectations is understandably fairly muted,' said AJ Bell investment director Russ Mould. 'However, as the company looks to bat off pressure from activist shareholder Elliott and convince the wider market on its recent shift in strategy, updates like today's are helpful for management credibility.' BP's commitment to fossil fuels was strengthened when the company also announced on Monday that it had made its largest oil and gas discovery in 25 years in a field off the coast of Brazil. BP said it had found a roughly 500-metre area of oil and gas at the Bumerangue field in the Santos basin, about 400km from Rio de Janeiro. 'BP delivered its first positive quarter in a very long time,' Maurizio Carulli, global energy analyst at Quilter Cheviot, commented on BP's earnings. 'What is perhaps most encouraging is that this is despite the average Brent oil price in the quarter being at $68 per barrel, well below the average of $76 per barrel seen in the first quarter of the year.' 'The management team has clearly started delivering on the strategy reset announced a few months ago,' Carulli added.
France 24
5 days ago
- France 24
Oil giant BP returns to profit in second quarter
Profit after tax came in at $1.63 billion in the April-June period, compared with a net loss of $129 million in the second quarter of 2024, BP said in an earnings statement. Stripping out exceptional items, underlying net profit was down nearly 15 percent. "This has been another strong quarter for BP operationally and strategically," chief executive Murray Auchincloss said in the earnings statement. BP on Monday said it made its biggest oil and gas discovery in 25 years off the coast of Brazil. In February, BP launched a major pivot back to its more profitable oil and gas business, shelving its once industry-leading targets on reducing carbon emissions and slashing clean energy investment. However, energy prices have come under pressure in recent months on concerns that US President Donald Trump's tariffs will hurt economic growth, while OPEC+ nations have produced more oil. BP managed to post a profit for the second quarter thanks to impairments which were lower than one year earlier, along with a revaluation of assets -- notably in relation to liquefied natural gas (LNG) -- and divestments. Sector woes By contrast, French rival TotalEnergies and US groups ExxonMobil and Chevron posted heavy falls to their net profit in the second quarter. British rival Shell posted a slight increase to its profit after tax for the latest reporting period. Shares in BP gained 1.7 percent in early London deals following its update. Auchincloss added that the company was launching "a further cost review and, whilst we will not compromise on safety, we are doing this with a view to being best in class in our industry". BP already announced plans this year to cut cleaner energy investment by more than $5 billion annually and offload assets worth a total of $20 billion by 2027. It recently agreed to sell its onshore wind energy business in the United States, while Shell has also scaled back its climate objectives. BP last month named Albert Manifold as its new chairman, replacing Helge Lund, whose departure was announced amid the strategy reset. The group's net profit plunged 70 percent in its first quarter, hit by weaker oil prices.
