BP p.l.c. Sponsored ADR (BP.US) Q3 profit exceeds expectations, as refining margins strengthen to offset weak oil prices.

Oil giant BP p.l.c. Sponsored ADR (BP.US) announced its third-quarter financial results on Tuesday, with underlying profits falling less than expected as increased refining margins partially offset the impact of falling oil prices. The data showed that underlying replacement cost profit (adjusted net profit) for the third quarter was $2.21 billion, higher than the analysts' average expectation of $2.02 billion, but lower than the $2.27 billion in the same period last year. Driven by the improvement in refining margins, BP p.l.c. Sponsored ADR's Downstream segment reported a third-quarter profit of $1.61 billion. This figure was slightly higher than the analysts' expectation of $1.59 billion and significantly higher than the $381 million reported in the same period last year. BP p.l.c. Sponsored ADR's operating cash flow for the third quarter was $7.8 billion, higher than the $6.8 billion in the same period last year. As previously announced, the net debt for the quarter remained stable at around $26 billion, in line with the previous quarter. BP p.l.c. Sponsored ADR stated that asset divestments and other income are expected to exceed $4 billion by 2025. In the third quarter, BP p.l.c. Sponsored ADR maintained the size of its quarterly share buyback program at $750 million and announced that it would conduct an additional $750 million in share buybacks in the next three months to maintain shareholder returns, despite a slight reduction in size compared to earlier this year. CEO Murray Auchincloss stated, "This quarter saw strong performance across all of our businesses, with continued robust operations," and "We are looking to accelerate the delivery of our plans, including a comprehensive review of our asset portfolio to simplify our business, as well as focusing on further improving cost performance and operational efficiency." Auchincloss noted that asset sales completed or announced this year were expected to total approximately $5 billion. Castrol sale progress not updated At the release of this financial report, it had been over 8 months since the company initiated a fundamental strategic shift. Amid intense acquisition rumors, BP p.l.c. Sponsored ADR is attempting to regain investor confidence by significantly reducing spending on renewable energy and refocusing on its traditional oil and gas business. Investors seem to generally approve of the oil and gas giant's shift in green strategy, with its stock price rising over 13% this year. Management restructuring, progress in cost reductions, and a recent series of oil exploration discoveries have also improved market sentiment. Market attention remains on the sale of Castrol lubricants, a key part of BP p.l.c. Sponsored ADR's $20 billion asset disposal plan, with no updates currently available on the progress of the sale. BP p.l.c. Sponsored ADR's European competitors Shell (SHEL.US) and TotalEnergies (TTE.US) reported their third-quarter results last month, with declining oil prices dragging down profits. This quarter, the average price of Brent crude oil fell 13% compared to the same period last year. However, thanks to strong trading performance in its large natural gas division, Shell's performance exceeded expectations, benefiting from stronger refining margins and increased oil and gas production to offset the impact of falling oil prices, while TotalEnergies' profits met market expectations. On Monday, BP p.l.c. Sponsored ADR announced that it had reached an agreement to sell a minority stake in its onshore pipeline assets in the Permian Basin and Eagle Ford Basin in the U.S. to private investment firm Sixth Street for $1.5 billion. BP p.l.c. Sponsored ADR had previously stated its goal of completing $20 billion in asset divestments by the end of 2027.