Fourth quarter profits continue to decline. BP p.l.c. Sponsored ADR (BP.US) promises a "reset" strategy.

Note that BP p.l.c. Sponsored ADR (BP.US) has promised to make major changes in its upcoming strategic update after reporting a significant decline in profits, in hopes of reversing the trend of long-term poor performance. This has attracted the attention of activist investor Elliott Management Corporation. BP p.l.c. Sponsored ADR's adjusted net profit for the fourth quarter was $1.17 billion, lower than the $2.99 billion in the same period last year, and also below analysts' average expectations of $1.3 billion. Net debt decreased from $24.3 billion three months ago to $23 billion. CEO Murray Auchincloss stated in a declaration on Tuesday, "We are now planning to fundamentally redefine our strategy, further enhance performance, all in order to increase cash flow and returns. This will be a new direction for BP p.l.c. Sponsored ADR, rather than business as usual." Even before reports of Elliott increasing its stake in BP p.l.c. Sponsored ADR were made, the strategic update on February 26 was seen as a key test of Auchincloss's vision for BP p.l.c. Sponsored ADR. After lagging behind peers for several years, investors are hoping to see significant changes in the company. While most major oil companies saw a decrease in profits in the fourth quarter due to falling energy prices, it is expected that only BP p.l.c. Sponsored ADR will reduce stock buybacks to strengthen its weaker balance sheet. The energy giant stated that it will outline its 2025 investor return plan in the strategic update. The company reiterated its plan to repurchase $1.75 billion worth of stock in this quarter, consistent with the pace of buybacks in previous quarters. Royal Bank of Canada analyst Biraj Borkhataria had predicted that BP p.l.c. Sponsored ADR would reduce this number. He stated in a report, "The forward guidance looks a bit soft relative to market expectations." Financial reports show that the downstream business, including refining and fuel sales to customers, posted an adjusted loss of $302 million. The company expects the first quarter refining margin to remain low. While BP p.l.c. Sponsored ADR's large but opaque trading business had helped the company navigate through market downturns in the past, it did not serve as a lifesaver this time. The statement mentioned that the company's oil trading business made a minimal contribution, while the gas trading business made a moderate contribution. Although Elliott's full plans for investing in BP p.l.c. Sponsored ADR are not clear, news of the fund holding stakes in the company had a significant impact on the stock price, which rose by 7.4% on Monday, marking the largest increase in two years. Analysts speculate that the fund may push for changes in the company's board, encourage the sale of low-carbon assets, and focus on increasing oil and gas production. Data shows that since 2020, Elliott has targeted nearly 80 companies, with about 95% of companies seeing a rise in stock price on the day news of Elliott increasing its stake was revealed. These increases have also lasted for a long time, with over two-thirds of target companies still maintaining an increase a year later, with an average increase of over 35%.