BP beats forecasts in third-quarter profits

(Sharecast News) - Oil titan BP has beaten market forecasts with its third-quarter earnings and said it has made progress on cost-cutting and strengthening its balance sheet, while full-year divestment proceeds are now expected to be higher than previously expected. Underlying replacement cost profit totalled $2.21bn, down from $2.35bn in the second quarter and $2.27bn in the third quarter of 2024, as improved profitability was offset by a higher underlying effective tax rate.

However, that was ahead of the consensus forecast of $2.02bn.

The solid performance came despite lower commodity prices during the period, with liquids prices averaging $60.02/bbl, down from $70.68/bbl the year before, though natural gas prices improved to $5.34/mcf from $4.75/mcf.

"We've delivered another quarter of good performance across the business with operations continuing to run well. All six of the major oil and gas projects planned for 2025 are online, including four ahead of schedule," said chief executive Murray Auchincloss.

"We continue to make good progress to cut costs, strengthen our balance sheet and increase cash flow and returns. We are looking to accelerate delivery of our plans, including undertaking a thorough review of our portfolio to drive simplification and targeting further improvements in cost performance and efficiency," he said.

Operating cash flow improved to $7.79bn, up from $6.76bn in the same period last year, while capital expenditure fell to $3.38bn from $4.54bn. The company said that full-year capital expenditure, which has totalled $10.37bn over the year to date, is still expected to be below $14bn.

Meanwhile, a further $750m of share buybacks were confirmed for the fourth quarter, following the $750bn of repurchases announced with the second-quarter results that were completed on late last month.

Looking ahead, BP also said that divestments and other proceeds would now be above $4bn in 2025, ahead of previous guidance of $3-4bn. The remaining proceeds are said to be weighted to the fourth quarter, with just $1.71bn of total divestments and other proceeds received over the first nine months of the year.