BP plc BP reported third-quarter 2024 adjusted earnings of 83 cents per American Depositary Share on a replacement-cost basis, excluding non-operating items. The figure beat the Zacks Consensus Estimate of 78 cents. The bottom line, however, declined from the year-ago reported figure of $1.15.

Total quarterly revenues of $48.3 billion lagged the Zacks Consensus Estimate of $62.5 billion and declined from $54 billion reported a year ago.

Better-than-expected quarterly earnings can be primarily attributed to higher liquids production and stronger retail fuel margins. However, the positives were partially offset by lower realized commodity prices and weaker refining margins.

Dividend Payout

BP has declared an interim dividend of 8 cents per ordinary share. The payment is scheduled for Dec. 20, 2024, and will be made to ordinary shareholders and American Depositary Share (ADS) holders registered as of Nov. 8, 2024.

Operational Performance

Oil Production & Operations

For the third quarter, BP reported a total production of 1,488 thousand barrels of oil equivalent per day (Mboe/d), up from 1,382 MBoe/d recorded in the year-ago quarter. The metric also beat our estimate of 1,369.1 MBoe/d.

BP sold liquids at $70.22 per barrel in the third quarter, down from $71.10 reported a year ago. The reported figure also lagged our estimate of $71.69.

The company sold natural gas at $2.25 per thousand cubic feet, down from $3.44 reported in the year-ago quarter. The figure also missed our estimate of $2.53.

Overall hydrocarbon price realization decreased year over year to $53.65 per Boe from $56.76 and lagged our estimate of $60.47.

After adjusting for non-operating items, underlying replacement cost earnings before interest and tax for the segment amounted to $2.8 billion. The figure was below $3.1 billion recorded in the year-ago quarter. However, it surpassed our estimate of $2.7 billion. The segment was affected by a decline in price realizations for liquids and higher exploration write-offs and higher costs, partially offset by higher production volumes.

Gas & Low Carbon Energy

Segmental profits totaled $1.8 billion, higher than $1.3 billion registered in the year-ago quarter. Reduced depreciation, depletion and amortization charges aided the segment’s third-quarter results. The figure exceeded our projection of $1.1 billion.

Total production of 890 MBoe/d declined from 946 MBoe/d in the year-ago quarter. Lower production partially offset the positives in the reported quarter. 

Customers & Products

After adjusting for non-operating items, underlying replacement cost earnings before interest and tax for the segment amounted to $381 million, significantly down from $2.1 billion reported in the year-ago quarter. The figure also lagged our projection of $1.8 billion. The segment was affected primarily due to lower refining margins and weaker oil trading performance in its products business. The negatives were partially offset by stronger retail fuel margins in its customers business.

BP-operated refining availability in the June-end quarter was 95.6%, indicating a decrease from 96.3% in the year-ago quarter.

Total refinery throughputs were 1,440 thousand barrels per day (MBbl/D), down from 1,450 MBbl/D in the corresponding period of 2023. The figure also missed our estimate of 1,446.3 MBbl/D.

Capex

Organic capital expenditure in the reported quarter totaled $4.3 billion. The company registered a total capital spending of $4.5 billion for the quarter.

Financials

BP's net debt was $24.3 billion at the end of the third quarter. Also, the firm announced a gearing of 23.3% in the third quarter.

Outlook

BP mentioned that its upstream production on a reported basis for the fourth quarter of 2024 would be lower than the third quarter. However, for 2024, the company expects both reported and underlying upstream production to surpass the figures recorded in the previous year.

For 2024, BP allocated a capital expenditure budget of $16 billion, with an expected even distribution between the first and second halves of the year. The company also anticipates a modest year-over-year increase in its depreciation, depletion and amortization expenses.

BP expects to generate more than $3 billion from divestments and other financial transactions in 2024. This effort is part of a broader goal to achieve $25 billion in divestments from the second half of 2020 through 2025.

BP’s Zacks Rank and Key Picks

Currently, BP carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the energy sector are Archrock Inc. AROC, Sunoco LP SUN and FuelCell Energy FCEL. Archrock presently sports a Zacks Rank #1 (Strong Buy), while Sunoco and FuelCell Energy carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

Sunoco LP is one of the largest distributors of motor fuel in the United States. The partnership distributes fuel to independent dealers, commercial customers, convenience stores as well as distributors. Its current distribution yield is greater than that of the composite stocks in the industry, providing unitholders with consistent returns.

FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.

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