BP 2025 Q1 Earnings Misses Targets as Net Income Declines 59%
Wednesday, Apr 30, 2025 8:26 am ET
27min read BP Trend
Revenue
BP's revenue for Q1 2025 decreased by 4.2% to $47.88 billion from the previous year's $49.96 billion. The Gas & Low Carbon Energy segment contributed $10.05 billion, while Oil Production & Operations accounted for $684 million. The Customers & Products sector generated $36.12 billion, with Other Businesses & Corporate bringing in $53 million. Total sales and other operating revenues reached $46.91 billion for the quarter.
Earnings/Net Income
BP's EPS saw a significant drop of 67.9%, declining to $0.04 in Q1 2025 from $0.14 in Q1 2024. The company's net income also fell sharply, plummeting 59.2% to $982 million from the previous year's $2.41 billion. This decline indicates challenging conditions, with EPS performance reflecting the broader downturn in net income.
Price Action
The stock price of BP edged down 0.14% during the latest trading day and has decreased 2.77% over the past week, plummeting 18.42% month-to-date.
Post-Earnings Price Action Review
Following BP's earnings report, the stock price has shown varied short-to-medium-term performance. Historical backtest results indicate a 65% probability of positive returns within the first three days after the earnings release, driven by immediate market reactions to revenue and net income metrics. However, the 10-day outlook presents a lower probability of gains, with only a 30% chance based on revenue impact and a 25% chance for net income, suggesting potential medium-term volatility. Over a 30-day horizon, the win rates stabilize at 50% for revenue and EPS, and 45% for net income, indicating some resilience in the longer term. While revenue metrics showed the highest potential returns at 5.90% over 30 days, net income and EPS returns were slightly lower, underscoring the mixed investor sentiment post-report. Investors should weigh these insights carefully when strategizing future moves based on BP’s earnings results.
CEO Commentary
Murray Auchincloss, CEO, underscored the beginning of BP's reset strategy, noting strong operational performance with refining availability exceeding 96% and upstream plant reliability surpassing 95%. He highlighted successful project launches and exploration findings, contributing to increased capacity targets. Auchincloss emphasized the need for vigilance amid market volatility, announcing a $0.5 billion reduction in CAPEX to $14.5 billion, while expressing confidence in BP’s growth plans and the robustness of its financial outcomes.
Guidance
BP anticipates divestment proceeds of $3 to $4 billion for 2025, with agreements totaling $1.5 billion completed year-to-date. The company has optimized its investment strategy, guiding CAPEX to $14.5 billion for the year, with organic CAPEX below $14 billion. Auchincloss aims for a 250 mbd capacity by 2027 and remains committed to managing net debt, which increased due to working capital builds but is expected to stabilize in a flat pricing environment.
Additional News
BP has faced significant strategic shifts amidst pressure from activist investor Elliott Management, which revealed a 5.006% stake in the company, advocating for deep spending cuts and a renewed focus on oil and gas. Elliott's influence has led to leadership scrutiny and discussions of BP as a potential takeover target. In line with strategic realignment, Giulia Chierchia, BP's sustainability chief, will depart on June 1, marking a shift away from previous green energy pursuits. BP has also announced plans to execute a $0.75 billion share buyback prior to its second-quarter results, maintaining its dividend at eight cents per share, reflecting efforts to enhance shareholder value amid ongoing challenges.
