BP issued an underwhelming first-quarter update, prompting analysts to lower earnings expectations for the oil-and-gas company. Upstream production is expected to fall while a higher-than-expected tax rate will drag on profit. First-quarter results are due to be published on April 29. Below is a selection of analysts' comments:

BP's Performance Update Should Lower Earnings Expectations

0734 GMT - BP's first-quarter business update should result in a 10%-15% hit to consensus earnings expectations due to higher-than-expected quarterly tax rate, Jefferies analysts Giacomo Romeo and Kai Ye Loh write. BP said Friday it expects its underlying effective tax rate to be around 50%. Investors are also unlikely to view the $4 billion increase in debt favorably, they write. Market watchers had expected a $2.2 billion increase in net debt, they add. The increases is largely due to an around $2 billon working capital increase, which should reverse in the following quarters and around $600 million from the Bunge acquisition, they write. Shares trade down 2.3% at 333.6 pence. (adam.whittaker@wsj.com)

BP's Refining & Trading Earnings Seen Negative Despite Margin Uptick

0927 GMT - BP's first-quarter earnings from its refining and trading segment are expected to be negative for the third quarter in a row, RBC Capital Markets analysts Biraj Borkhataria and Adnan Dhanani write. This is despite a small increase in refining margins and better liquids trading, they write. The first-quarter update highlighted weak gas and oil trading with overall weaker production, they add. The one bright spot was BP's customer segment where earnings should rise on-quarter, they write. Shares trade down 2.3% at 333.85 pence. (adam.whittaker@wsj.com)

BP's High Tax Rate to Drag on Earnings

0927 GMT - BP's higher-than-expected tax rate in its first quarter will drag on the energy major's net income, RBC Capital Markets analysts Biraj Borkhataria and Adnan Dhanani write. The analysts cut their quarterly net income estimate to $1.46 billion from $1.82 billion after BP said it expects a 50% tax rate over the period. RBC had expected a 41% tax rate, they write. Refining and trading earnings before interest and tax are now seen at a $43 million loss from a $257 million profit, they say. Shares trade down 2% at 334.45 pence.(adam.whittaker@wsj.com)

BP's Higher Net Debt Comes at Bad Time, Barclays Says

1000 GMT - BP reported a weak first-quarter trading update, which included an unhelpful increase in net debt, Barclays analysts write. BP's net debt is expected to have increased by $4 billion. The volatile trading environment means a stronger balance sheet would be preferable, they add. The analysts lower their replacement cost operating profit estimates by 8% to $4.9 billion and adjusted net income forecast by 18% to $1.7 billion. Shares trade down 1.7% at 335.65 pence.(adam.whittaker@wsj.com)

(END) Dow Jones Newswires

April 11, 2025 06:39 ET (10:39 GMT)

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