By Tipranks
BP PLC (NYSE: BP) boosted its core earnings in the first quarter of 2022 thanks to higher oil and gas prices and posted a significant loss of $20.4 billion after divesting its assets in Russia.
The transnational company BP (until 2001 – British Petroleum) – an oil giant, headquartered in London, operates in all areas of the oil and gas industry: exploration and production of oil and gas, refining and marketing; as well as in the field of alternative energy (production of biofuels), maritime transport.
Since the beginning of this year, BP’s capitalization has grown by 25.3% and is about 76.14 billion pounds ($95 billion).
The company sold a stake equal to 19.75% of the shares of Rosneft, for which there was a write-off of $13.5 billion and also abandoned joint projects. Cumulative write-offs amounted to $25.5 billion.
At the same time, BP’s profit for January-March 2022 was $6.2 billion, compared to $4.1 billion in October-December 2021 and $2.6 billion in January-March 2021. Earnings margins exceeded the company’s own analyst forecast of $4.49 billion.
The result of the first quarter – the net debt of the oil company amounted to $27.5 billion compared to $33.3 billion at the end of the first quarter of 2021.
“Our decision in February to withdraw from Rosneft’s shareholding resulted in significant non-cash expenses and general losses, which we reported today. But it hasn’t changed our strategy, our financial structure, or our expectations for shareholder distribution,” said BP CEO Bernard Looney.
In addition to $1.6 billion in share buybacks in the first quarter, the company plans to buy back $2.5 billion worth of shares.
Analyst Martin Raths noted after the company’s announcement: “To our knowledge, this is the first time that BP has described its trading results as ‘exceptional’ in both oil and gas in the same quarter. In addition, earnings were also affected by high oil and gas prices and high refining margins.”
The company ‘s shares over the past year have shown an increase of almost 26 % . The average target price is $36.50 with 17.1% upside potential.
TipRanks’ Hedge Fund Trading Activity tool shows that BP’s credibility is very strong right now, as the total asset change across all 11 hedge funds active last quarter increased by 1.4 million shares.
As you can see, investors are positive about BP, given the rise in commodity prices. Shares of BP rose more than 8% to close at $31.18 after the release of the results.
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