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BP (BP.L) profits slumped to a fresh four-year low in the fourth quarter, which comes amid reports that an activist hedge fund manager has taken a stake in the oil major.
For the fourth quarter, BP reported an underlying replacement cost profit of $1.17bn (£947m), falling sharply from the $2.27bn it reported in the third quarter. Underlying replacement cost profit is the metric that BP (BP.L) uses as its version of net income.
This latest net income figure was the lowest since the fourth quarter of 2020 during the height of the pandemic, when BP (BP.L) posted an underlying replacement cost profit of $115m.
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For the year, BP (BP.L) posted underlying cost profit of $8.92bn, down from $13.84bn for 2023. The oil major said that the fall in profits reflected weaker realised refining margins, among other factors.
Despite weaker quarterly results, BP (BP.L) announced another share buyback of $1.75bn, and an ordinary share dividend of $0.08.
BP (BP.L) CEO Murray Auchincloss said: "Building on the actions taken in the last 12 months, we now plan to fundamentally reset our strategy and drive further improvements in performance, all in service of growing cash flow and returns."
Shares in BP (BP.L) were flat following the release of BP's latest results on Tuesday morning.
The oil major's operating cash flow grew to $7.43bn in the fourth quarter, up from $6.76bn in Q3. Over the year, however, it had shrunk to $27.3bn from $32.04bn in 2023.
Kate Thompson, chief financial officer at BP (BP.L), said: "During the year, we introduced our target to deliver at least $2bn of savings by the end of 2026 relative to 2023 and are making strong progress, achieving $0.8bn of structural cost reduction."
Maurizio Carulli, energy and materials analyst at Quilter Cheviot, said: "BP’s fourth quarter results came in slightly better than expected at operating level this morning, albeit this is after a recent trading statement saw its guidance lowered quite dramatically.
"The company recognises that it has work to do with shareholders, and getting this right will be key for the return of investor confidence which has been negatively influenced by poor share price performance in 2024."
This latest set of results come following reports on Monday that activist hedge fund manager Elliott Investment Management had built a stake in the company.
Bloomberg reported on Saturday that Elliott had amassed a significant holding in BP (BP.L), which has typically been the first step in its plans to push for change at other public companies.