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BP plc BP reported third-quarter 2025 adjusted earnings of 85 cents per American Depositary Share on a replacement-cost basis, excluding non-operating items. The figure beat the Zacks Consensus Estimate of 72 cents. The bottom line also improved from the year-ago reported figure of 83 cents.
Total quarterly revenues of $49.3 billion lagged the Zacks Consensus Estimate of $63 billion and increased from $48.3 billion reported a year ago.
The strong quarterly earnings can be primarily attributed to an increase in oil production volumes and higher realized refining margins. However, lower hydrocarbon price realization partially offset the positives.
BP p.l.c. price-consensus-eps-surprise-chart | BP p.l.c. Quote
Oil Production & Operations
For the third quarter, BP reported a total production of 1,556 thousand barrels of oil equivalent per day (Mboe/d), up from 1,488 MBoe/d recorded in the year-ago quarter. The metric beat our estimate of 1,441.3 MBoe/d.
BP sold liquids at $59.58 per barrel in the third quarter, down from $70.22 reported a year ago. The company sold natural gas at $3.32 per thousand cubic feet (mcf), up from $2.25 reported in the year-ago quarter. Overall, hydrocarbon price realization decreased year over year to $47.89 per Boe from $53.65.
After adjusting for non-operating items, underlying replacement cost earnings before interest and tax for the segment amounted to $2.3 billion. The figure was below the $2.8 billion recorded in the year-ago quarter. The reported figure met our estimate of $2.3 billion. The segment was affected by lower price realizations and an increased depreciation, depletion and amortization charge. However, this was partially offset by production gains and lower exploration write-offs.
Gas & Low Carbon Energy
Segmental profits totaled $1.52 billion, lower than $1.76 billion registered in the year-ago quarter. The segment’s results were impacted by a decline in production and lower liquids price realization. The figure beat our projection of $1.13 billion.
Total production of 806 MBoe/d declined from 890 MBoe/d in the year-ago quarter.
Customers & Products
After adjusting for non-operating items, underlying replacement cost earnings before interest and tax for the segment were reported at $1,716 million, significantly higher than $381 million in the year-ago quarter. The increase can be primarily attributed to higher realized refining margins. In the customers segment, structural cost reductions supported earnings, while in the products business, lower turnaround activity further supported the results.
BP-operated refining availability in the September-ended quarter was 96.6%, compared to 95.6% in the year-ago quarter.
Total refinery throughputs were 1,516 thousand barrels per day (MBbl/D), higher than 1,440 MBbl/D in the corresponding period of 2024.
Organic capital expenditure in the reported quarter totaled $3.33 billion. The company registered a total capital spending of $3.4 billion for the quarter.
BP's net debt was $26.1 billion at the end of the third quarter. Also, the firm announced a gearing of 25.1% for the quarter.
BP expects fourth-quarter 2025 upstream production to remain flat compared to the previous quarter’s level. It also anticipates a seasonal decline in volumes in its customers' business and a similar refinery turnaround activity compared to the third quarter.
For 2025, BP forecasts slightly lower overall upstream production versus 2024, with oil output higher and gas & low-carbon output lower. Growth is anticipated in its customer segment, supported by cost reductions. BP expects divestment proceeds of over $4 billion, a slightly higher DD&A compared to 2024 levels and approximately 40% effective tax rate.
BP currently carries a Zacks Rank #3 (Hold).
Some top-ranked stocks from the energy sector are Cenovus Energy CVE, Canadian Natural Resources Ltd. CNQ and FuelCell Energy FCEL. While Cenovus Energy currently sports a Zacks Rank #1 (Strong Buy), Canadian Natural Resources and FuelCell carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cenovus Energy is a leading integrated energy firm. Starting with pumping out oil from its oil sands projects in Canada, the company’s operations include marketing the produced oil, natural gas and natural gas liquids. Cenovus Energy operates key projects at Christina Lake, Foster Creek and Sunrise, contributing to a robust production outlook in the future.
Canadian Natural Resources is one of the largest independent energy companies in Canada engaged in the exploration, development and production of oil and natural gas. The company boasts a diversified portfolio of crude oil, natural gas, bitumen and synthetic crude oil. It has delivered 25 consecutive years of dividend increases, one of the longest streaks among global oil producers.
FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.
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This article originally published on Zacks Investment Research (zacks.com).
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