Why BP Shares Are Trading Lower Premarket Today
Portfolio Pulse from Lekha Gupta
BP PLC reported lower-than-expected first-quarter FY24 results, with sales of $48.88 billion missing the consensus of $55.08 billion and adjusted EBITDA declining to $10.3 billion from $13.1 billion a year ago. Hydrocarbons production decreased by 5.7% Y/Y, and net debt rose to $24.02 billion. Despite this, BP announced a dividend and completed $1.75 billion in share buybacks, expecting to buy back $3.5 billion in shares in the first half of 2024. The company's outlook for FY24 includes slightly higher reported and underlying upstream production and a capital expenditure of around $16 billion.
May 07, 2024 | 11:34 am
News sentiment analysis
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NEGATIVE IMPACT
BP's Q1 FY24 earnings missed expectations with lower sales and adjusted EBITDA, a decrease in hydrocarbons production, and an increase in net debt. However, the company announced a dividend and completed significant share buybacks.
The missed earnings and lower financial metrics are likely to negatively impact investor sentiment in the short term, despite the dividend announcement and share buybacks.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
NEUTRAL IMPACT
First Trust Energy Income Partners Strategy ETF, which offers exposure to BP, might see indirect effects from BP's disappointing Q1 FY24 performance.
EIPX's performance may be indirectly influenced by BP's financial results, given its exposure to the company.
CONFIDENCE 70
IMPORTANCE 40
RELEVANCE 50
NEUTRAL IMPACT
Investors can gain exposure to BP through the Direxion Hydrogen ETF, which may be indirectly impacted by BP's lower-than-expected Q1 FY24 results.
While HJEN is not directly impacted by BP's earnings, its performance may be influenced by BP's results due to exposure.
CONFIDENCE 70
IMPORTANCE 40
RELEVANCE 50