British oil giant BP announced a $2.3 billion profit for the third quarter of 2024, surpassing analyst expectations of $2.1 billion. This figure, however, marks the company’s weakest quarterly earnings in nearly four years, primarily due to declining crude prices and lower refining margins.
Key Highlights
- Profit Comparison: The third-quarter profit fell from $2.8 billion in the second quarter and $3.3 billion in the same period last year.
- Market Reaction: BP’s shares dropped by approximately 2.5% following the announcement, with its stock price down over 16% year-to-date.
- Dividends and Buybacks: Despite the earnings decline, BP maintained its dividend at 8 cents per share and upheld its share buyback program at $1.75 billion for the next quarter.
Strategic Adjustments
BP has faced challenging market conditions, with oil prices dropping by more than 17% in the third quarter due to concerns over global demand. In response, BP’s CEO Murray Auchincloss emphasized a strategic focus on value over volume in oil and gas production, aligning with the company’s broader energy transition goals.
Financial Outlook
Net debt for BP rose to $24.3 billion, attributed to lower operating cash flow and increased capital expenditures. Analysts predict that BP may need to adjust shareholder returns next year, potentially moving towards a cash flow from operations (CFFO) payout model to allow for financial flexibility.
Industry Context
BP’s results come amid broader industry challenges, with peers like Shell and TotalEnergies set to release their quarterly reports soon. The global oil market remains volatile, impacting financial performances across the sector.
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