BP (NYSE:BP)
Despite posting Q3 numbers that blew away market expectations, BP (NYSE:BP) shares are trading sideways on Tuesday. This is the case even though the company’s adjusted net income of $8.15B was higher than the $6.1B analyst average.
Due in large part to accounting adjustments necessitated by changes in forward gas prices, an indication of the unpredictable global gas markets and their influence on the energy sector, BP (BP) actually recorded a $2.2B net loss for the quarter, down from a $9.2B net profit in Q2.
Because of the increased volatility, BP’s (BP) major trading operation contributed an additional $6.24 billion to the company’s bottom line in the third quarter of 2015, more than double the $3 billion profit it posted in the second quarter.
RBC analyst Biraj Borkhataria said, “the extraordinary gas trading outcome is especially noteworthy considering the Freeport LNG outage.” Borkhataria alluded to the fire that shut down the Texas liquefied natural gas facility in June.
BP stock announced plans for a $2.5B share buyback before reporting its Q4 results. The board maintained its commitment to allocating 60% of FY 2022 excess cash flow to buybacks.
Despite a shaky demand forecast, analysts say the company’s better-than-expected profits would undoubtedly increase pressure for windfall taxes.
Analyst Jamie Maddock from Quilter Cheviot stated, “While the dividend stays constant, unlike competitor Shell’s, BP stock has announced another share purchase, perhaps adding fuel to the fire for those clamoring for windfall taxes.”
The Financial Times recently conducted an interview with BP (BP) CFO Murray Auchincloss said, “$2 out of every $3 we earn [in the North Sea] is going to the government,” and that it was a “particularly tough period for society.”
This year BP stock has risen 21% and 13% in the previous 12 months.
Meta Description
BP’s stock price dips marginally despite the company’s $8.2 billion profit, which is much above analyst projections. Still, there is speculation that the company may increase its rhetoric on a more significant windfall tax.
Featured Image – Megapixl © Tktktk
Author Shariq Khan 
