BP Q1 2024 Earnings Highlights

1. Despite an unplanned outage at the Whiting refinery, bp delivered resilient financial performance. The adjusted EBITDA for the first quarter was $10.3 billion, and underlying earnings reached $2.7 billion.

2. BP aims to achieve at least $2 billion of cash cost savings by the end of 2026. This goal will be accomplished through strategies such as high-grading the portfolio, digital transformation, supply chain efficiencies, and global capability hubs.

3. Segment Results:

   - Gas & Low Carbon Energy: The RC profit before interest and tax in this segment for Q1 2024 was $1.7 billion. It reflects lower realizations and foreign exchange losses on Egyptian pound balances, partially offset by strong gas marketing and trading results⁸.

   - Oil Production & Operations: The RC profit before interest and tax in this segment for Q1 2024 was $3.1 billion. Factors contributing to this result include higher oil production and the successful operation of the ACE platform in the Caspian Sea.

4. Effective Tax Rate: The underlying effective tax rate (ETR) for the quarter was 43%. Reported profit, adjusted for inventory holding gains and other items, was $2.3 billion⁸.

BP's financial resilience, cost-saving initiatives, and segment-specific performance are key takeaways from their first quarter 2024 results. BP’s stock price had mixed reactions following the release of its first quarter 2024 results. Let’s take a closer look at the market response:

Earnings Per Share (EPS):

BP reported earnings per share (EPS) of 97 cents, which fell below the analyst estimate of $1.001. This miss likely contributed to some investor uncertainty.

Revenue:

The company’s revenue for Q1 2024 was $48.88 billion, which was 11.86% worse than the analyst estimate of $55.46 billion1. The revenue shortfall may have impacted investor sentiment.

Underlying Profit:

BP’s underlying replacement cost (RC) profit for the quarter was $2.7 billion, compared to $3.0 billion in the previous quarter2.

Factors affecting the result included lower oil and gas realizations, the impact of the Whiting refinery outage, and significantly weaker fuels margins. However, other factors, such as lower turnaround activity, strong oil trading results, and higher realized refining margins, partially offset these challenges. Reported profit for the quarter was $2.3 billion, adjusted for inventory holding gains and net adverse impact of adjusting items.

In summary, while the financial performance was resilient, the stock market reacted cautiously due to the EPS miss and revenue shortfall.

As of the most recent data, analysts’ recommendations for BP’s stock are as follows:

Consensus Rating: Based on the issued ratings from 9 analysts over the past year, the consensus rating for BP stock is Moderate Buy. This assessment considers the current distribution of ratings, which includes 1 sell rating, 2 hold ratings, and 6 buy ratings for BP.

Price Targets:

The average twelve-month price prediction for BP is $43.88.

The high price target stands at $47.00, while the low price target is $42.00