BP PLC's stock is experiencing a downturn following the release of its third-quarter financial results, which revealed a shortfall in revenue. BP reported sales and other operating revenues at $47.254 billion, falling short of market expectations set at $52.557 billion. A notable factor was the decline in hydrocarbon production, which reported a reduction to 890 mboe/d, marking a 6% year-over-year decrease. This downturn was primarily attributed to a natural base decline, resulting in a 4% drop in underlying production.
Looking at their renewables segment, BP's portfolio showed a robust 46.8GW in the pipeline, with Lightsource BP contributing a substantial 20.5GW to this total. The company's adjusted EBITDA saw a decline, arriving at $9.65 billion versus $10.31 billion from the previous year. Despite this, underlying RC profit per American Depositary Share surpassed expectations, finishing at $0.83 against the consensus estimate of $0.76.
BP's operating cash flow also took a hit, registering at $6.76 billion compared to $8.75 billion from the same quarter last year. Their capital expenditure has risen to $4.54 billion from $3.60 billion a year prior. Additionally, BP's net debt also climbed, growing from $22.32 billion a year ago to $24.27 billion. CEO Murray Auchincloss highlighted BP's priorities, emphasizing a streamlined, high-value approach and a focus on growing through the energy transition phase.
The interim dividend was announced at 8.000 cents per share, with ADS holders receiving $0.48 per share, scheduled for December 20, 2024. In terms of share buybacks, BP completed a repurchase of $1.75 billion during the quarter and plans similar actions before the release of its fourth-quarter earnings. This is part of a broader $1.75 billion commitment for additional buybacks planned for the fourth quarter of 2024.
Looking ahead, BP forecasts a dip in upstream production for the fourth quarter of 2024. Seasonal declines are expected in its customer business, with fuel margins remaining vulnerable to supply cost shifts. Refining margins are projected to stay low, albeit susceptible to changes in product crack spreads. For the fiscal year 2024, BP anticipates reported and underlying upstream production to slightly exceed last year's levels. The company forecasts divestments and other proceeds to surpass $3 billion—an increase from prior estimates.
BP maintains its target of $25 billion in divestments and proceeds spanning mid-2020 to 2025. Capital expenditure for 2024 is projected to be around $16 billion annually. Adding to its strategic moves, BP's recent agreement with Apollo Global Management will see the acquisition of a non-controlling stake in BP Pipelines TAP Limited for approximately $1 billion. Investors should note that BP shares are currently down by 2.93%, trading at $30.14 in the premarket.
This decline precedes the impact of looming lower crude oil prices combined with current earnings reports. Meanwhile, investment avenues such as Donoghue Forlines Yield Enhanced Real Asset ETF (DFRA) and First Trust Exchange-Traded Fund IV FT Energy Income Partners Strategy ETF (ticker: EIPX) offer exposure to BP stock.
