BP's 1Q Earnings Came 60% Above Expectations -- Earnings Review

By Jaime Llinares Taboada

BP PLC reported results for the first quarter of 2021 on Tuesday. Here's what you we watched:

UNDERLYING RC PROFIT: The British oil major made an underlying RC profit of $2.63 billion in the first quarter, well above the $1.64 billion market consensus--compiled by the company from 23 brokers. It was the highest for any quarter since April-June 2019, and the beat against expectations was mainly driven by an exceptional gas marketing and trading performance.

NET PROFIT: Net profit rose to $4.67 billion, also beating the market consensus of $2.06 billion--taken from FactSet and based on nine analysts' forecasts.

WHAT WE WATCHED:

-PRODUCTION: BP said its production declined 12% to 3.27 million barrels a day, and forecast full-year upstream output will be lower than in 2020 as a result of asset sales. Underlying production--which adjusts for acquisition, divestments and other one-offs--should be slightly higher with the ramp-up of major projects, the company said.

-ROSNEFT: Rosneft's contribution to BP's underlying RC profit grew to $363 million in the first quarter from $311 million in October-December and a $17 million loss in the first quarter of 2020. The Russian company, which is 19.75% owned by BP, benefited from stronger oil prices and favorable foreign-exchange effects.

-DEBT: BP confirmed its net debt fell below $35 billion in the first quarter, to $33.31 billion as of March 31. As a result, the group is starting a $500 million share buyback program in the current quarter, and flagged further buyback plans for the third quarter, which will be based on reported and expected 2021 surplus cash flows.

Write to Jaime Llinares Taboada at [e-mail]; @JaimeLlinaresT

(END) Dow Jones Newswires

April 27, 2021 05:28 ET (09:28 GMT)

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