BP plc BP reported fourth-quarter 2024 adjusted earnings of 44 cents per American Depositary Share on a replacement-cost basis, excluding non-operating items. The figure lagged the Zacks Consensus Estimate of 56 cents. The bottom line also declined from the year-ago reported figure of $1.07.

Total quarterly revenues of $48.1 billion lagged the Zacks Consensus Estimate of $57.7 billion and declined from $52.6 billion reported a year ago.

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The weak quarterly results can be primarily attributed to lower commodity price realizations and weaker refining margins. Lower contributions from the company's customers and products business also affected its fourth-quarter results.

Dividend Payout

BP has declared an interim dividend of 8 cents per ordinary share. The payment, scheduled for Mar. 28, 2025, will be made to ordinary shareholders and American Depositary Share (ADS) holders registered as of Feb. 21, 2025.

Operational Performance

Oil Production & Operations

For the fourth quarter, BP reported a total production of 1,449 thousand barrels of oil equivalent per day (Mboe/d), up from 1,421 MBoe/d recorded in the year-ago quarter. The metric also beat our estimate of 1,370.6 MBoe/d.

BP sold liquids at $65.56 per barrel in the fourth quarter, down from $76.22 reported a year ago. The reported figure also lagged our estimate of $68.42.

The company sold natural gas at $3.29 per thousand cubic feet, down from $3.65 reported in the year-ago quarter. The figure, however, exceeded our estimate of $2.61.

Overall hydrocarbon price realization decreased year over year to $52.28 per Boe from $59.69 and lagged our estimate of $56.87.

After adjusting for non-operating items, underlying replacement cost earnings before interest and tax for the segment amounted to $2.9 billion. The figure was below $3.5 billion recorded in the year-ago quarter. However, it surpassed our estimate of $2 billion. The segment was affected by lower price realizations, higher exploration write-offs and an increase in depreciation charges. However, this was partially offset by increased production volumes.

Gas & Low Carbon Energy

Segmental profits totaled $1.99 billion, higher than $1.78 billion registered in the year-ago quarter. The segment was aided by higher price realizations, lower exploration write-offs and a lower depreciation, depletion and amortization charge. The figure exceeded our projection of $1.52 billion.

Total production of 850 MBoe/d declined from 899 MBoe/d in the year-ago quarter. Lower production and an average gas marketing and trading result 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 were reported at a loss of $302 million, significantly down from a profit of $803 million in the year-ago quarter. The figure also lagged our projection of a profit of $759.9 million. The segment was primarily affected by lower refining margins and weaker contributions from its customers business.

BP-operated refining availability in the December-end quarter was 94.8%, indicating a decrease from 96.1% in the year-ago quarter.

Total refinery throughputs were 1,390 thousand barrels per day (MBbl/D), up from 1,312 MBbl/D in the corresponding period of 2023. The figure also surpassed our estimate of 1,310.5 MBbl/D.

Capex

Organic capital expenditure in the reported quarter totaled $4.2 billion. The company registered a total capital spending of $3.7 billion for the quarter.

Financials

BP's net debt was $23 billion at the end of the fourth quarter. Also, the firm announced a gearing of 22.7% in the reported quarter.

Outlook

BP mentioned that its upstream production on a reported basis for the first quarter of 2025 would be lower compared to the fourth quarter of 2024 primarily due to its previously announced divestments in Trinidad and Egypt. For its products business, BP expects low refining margins to persist in the first quarter of 2025. For 2025, the company expects both reported and underlying upstream production to remain lower than the prior-year figures.

BP expects to generate more than $3 billion from divestments and other financial transactions in 2025. 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

BP currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the energy sector are Sunoco LP SUN,SM Energy SM and Archrock Inc. AROC. Sunoco and SM Energy currently sport a Zacks Rank #1 (Strong Buy) each, while Archrock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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 and distributors. Its current distribution yield is greater than that of the industry's composite stocks, providing unitholders with consistent returns.

SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The increased production, combined with the favorable oil price environment, is expected to contribute to its bottom line.

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.

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