BP earnings have jumped in the third-quarter, thanks to a rise in oil and gas prices.
Underlying replacement cost profit jumped from $2.8bn last quarter to $3.3 bn.
“Our businesses are generating strong underlying earnings and cash flow while maintaining their focus on safe and reliable operations,” said chief executive officer, Bernard Looney. He said the results showed “another good quarter”.
“Rising commodity prices certainly helped, but I am most pleased that quarter by quarter, we’re doing what we said we would – delivering significant cash to strengthen our finances, grow distributions to shareholders and invest in our strategic transformation. This is what we mean by performing while transforming.”
Commenting on the results, investment manager at Brewin Dolphin, Stuart Lamont, said: “Underlying replacement cost profit – its preferred measure of profit or loss – is ahead of the second quarter of this year and well ahead of the same period in 2020, while debt has ticked down and cashflow is strong, buoyed by higher and more sustained commodity prices.
“A further share buyback and an attractive dividend are good news for shareholders, but this update being delivered during COP26 is a reminder that BP has a long road ahead of it in becoming a low carbon energy company,” he added.
BP shares slipped 0.45% at open to 355p.
Analysts at AJ Bell suggested that the BP share price may have dipped because investors had already factored in the impact of stronger energy prices.
“BP’s results may have been better than forecast but one could argue this isn’t really a surprise given the strength of commodity prices during the period in question,” said Russ Mould, investment director at AJ Bell.
“Notably there was a big difference between the underlying and reported figures, linked to accounting rules over hedging contracts affected by the unprecedented surge in natural gas prices. These made the numbers a bit of a messy affair.
“The oil major did have a sweetener up its sleeve for investors, committing to an additional share buyback and effectively introducing a rather smart mechanism where it will buy back $1 billion worth of shares a quarter if oil prices are trading above $60 per barrel.