BP Plc will start buying back shares issued to partially cover its dividend during the oil-price slump as third-quarter profit beat estimates. Expectations for the London-based company’s earnings were already high after stronger results from most of its peers last week underscored the industry’s improving fortunes. The resumption of share buybacks is a signal of confidence that the worst of the downturn is over as production and cash flow jumped.
“We have made strong progress this year in adjusting to the lower oil price environment,” Chief Financial Officer Brian Gilvary said in a statement. “Given the momentum we see across our businesses and our confidence in the outlook for the group’s finances, we will be recommencing a share buyback program.”
Profit adjusted for one-time items and inventory changes was $1.87 billion, almost double the $933 million posted a year earlier, the company said Tuesday. That surpassed the $1.58 billion average estimate of 12 analysts surveyed by Bloomberg.
With Brent crude, the international benchmark, rising above $60 a barrel last week for the first time since July 2015, the world’s biggest energy companies have signaled a return to growth. Total SA posted the highest profit from pumping oil and gas in more than two years, followed by consensus-beating earnings from Chevron Corp. and Exxon Mobil Corp. — with the latter posting a 50 percent jump in net income.
BP’s oil and gas production averaged 3.6 million barrels of oil equivalent a day in the third quarter, an increase of 14 percent from a year earlier. Operating cash flow, adjusted for payments related to the 2010 Gulf of Mexico oil spill, was $6 billion, up from $2.5 billion a year earlier.