Despite a drop in earnings from a year earlier, BP (NYSE: BP) beat the second-quarter profit estimates as its chief executive Murray Auchincloss said that the UK supermajor “can and will do better for its investors.”
BP on Tuesday reported an underlying replacement cost profit – the closest metric to net profit – of $2.4 billion for the second quarter, down from $2.76 billion for the same period of 2024, but well ahead of a company-provided analyst consensus estimate of $1.82 billion.
Compared to the underwhelming first-quarter result, the $1-billion increase in the underlying replacement cost (RC) profit in Q2 benefited from an average gas marketing and trading result, stronger realized refining margins, stronger earnings in the customers division, and a strong oil trading result, BP said. These were partly offset by lower liquids and gas realizations and significantly higher level of refinery turnaround activity.
BP also announced a dividend per ordinary share of 8.32 cents, an increase of 4%, and a further $750 million share buyback for the second quarter.
In the results release, BP also addressed the pace of its structural cost savings and announced a new review into costs, as Elliott Management, the activist U.S. hedge fund with a 5% stake, is reportedly asking for much higher cost savings.
BP has a target of $4 billion–$5 billion of structural cost reductions by the end of 2027 compared to a 2023 baseline.
In the Q2 earnings release today, BP said that it had delivered structural cost reductions of $900 million for the first half of 2025 and has cut costs by $1.7 billion against the 2023 baseline.
“We are two quarters into a twelve-quarter plan and are laser-focused on delivery of our four key targets – and while we should be encouraged by our early progress, we know there’s much more to do,” CEO Auchincloss said in a statement.
Auchincloss and BP’s chair elect, Albert Manifold, have agreed that they would conduct a thorough review of the portfolio of businesses.
“We are also initiating a further cost review and, whilst we will not compromise on safety, we are doing this with a view to being best in class in our industry,” the CEO said, adding “bp can and will do better for its investors.”
By Tsvetana Paraskova for Oilprice.com
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