Oil and gas Giant BP beat second-quarter earnings expectations on Tuesday while expanding its dividend and share buyback program. The Company said it would buy back $1.4 billion of its shares in the third quarter on the back of a $2.4 billion cash surplus accrued in the first half of the year.
The oil and gas Giant BP increased its dividend by 4% to 5.46 cents per share, having halved it to 5.25 cents per share in the second quarter of 2020. It anticipates buybacks of around $1 billion per quarter and an annual dividend increase of 4% through 2025, based on an estimated average oil price of $60 per barrel.
The energy major posted full-year underlying replacement cost profit, used as a proxy for net profit, of $2.8 billion. That compared with a loss of $6.7 billion over the same period a year earlier and $2.6 billion net profit for the first quarter of 2021.Analysts polled by Refinitiv had expected a second-quarter net profit of $2.06 billion. CEO Bernard Looney said on Tuesday that a combination of strong underlying performance, an improving balance sheet and higher commodity prices had enabled the Company to up its returns to shareholders.
The shares of the oil and gas Giant BP started Tuesday’s session up almost 15% year-to-date, having collapsed roughly 47% in 2020. The Company’s stock added a further 2.3% in early trade on Tuesday.Operating cash flow sat at $5.4 billion at the end of the second quarter, which includes the annual payment of around $1.2 billion the Company makes for the Gulf of Mexico oil spill in 2010. The net debt dropped to $32.7 billion from $33.3 billion in the first quarter, marking the fifth consecutive quarter of decreased debt from the $51 billion seen in the first quarter of 2020.