Yahoo Finance BP shares drop despite $1.25bn share buyback pledge
BP's (BP.L) stock fell on Tuesday morning in London even as the oil major said it would move to buy back $1.25bn (£920m) in shares.
The company has already completed a $1.4bn share buyback this year, announced in its second-quarter results.
It reported a big increase in profits from the year earlier, emulating its peers which have all benefitted from rising oil and gas prices in recent months.
BP's Q3 adjusted net income hit $3.3bn compared with $86m a year earlier. This beat the average analyst estimate of $3bn. Cashflow, meanwhile, increased from $5.2bn to $6bn.
Losses hit $2.5bn for the quarter driven by significant adverse fair value accounting effects of $6.1bn pre-tax, primarily due to the exceptional increase in forward gas prices towards the end of the quarter, it said.
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“This has been another good quarter for bp — our businesses are generating strong underlying earnings and cash flow while maintaining their focus on safe and reliable operations," said CEO Bernard Looney.
"Rising commodity prices certainly helped, but I am most pleased that quarter by quarter, we’re doing what we said we would — delivering significant cash to strengthen our finances, grow distributions to shareholders and invest in our strategic transformation.”
Shares had dipped 2.1% by 9.05am on Tuesday.
"Judging by the moves in BP’s share price so far this year investors appear to have little confidence that the business will be able to meet CEO Bernard Looney’s plans for a 40% reduction in oil and gas production by 2030," said Michael Hewson, chief market analyst at CMC Markets UK.
"The wind has been blowing towards a renewables transition for several years now and yet BP has continued to pay huge dividends without investing significant amounts for the inevitable move away from fossil fuels, as climate change moves up the political agenda."
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