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BP: Strong Performance Seen Continuing In 2018

May 04, 2018 4:56 PM ETBP p.l.c. (BP)50 Comments


  • BP announced first-quarter underlying replacement cost profit, which is utilized as a substitute for net profit, of $2.586 billion well over the $2.2 billion forecasted, according to a company-provided survey.
  • Production for the quarter was 2,605K Boe/d (not including Rosneft), 9.1% higher than the first quarter of 2017.
  • With the economic frame continuing to strengthen along with bullish oil prices, the company is set to outperform its peers in 2018.

Investment Thesis

BP Plc (NYSE:BP) is one of my selected oil super-majors that you can add to your oil stocks basket with total confidence. The company is shining a light of excellence, with underlying profits that have more than doubled year over year, and it has achieved a substantial success from its upstream and downstream segments as the first quarter results are again confirming.

Furthermore, BP is one of the most promising oil majors viewed from an investor's perspective, because the Macondo litigation is finally unclasping its detrimental financial embrace. With the economic frame continuing to strengthen along with bullish oil prices, the company is set to outperform its peers, assuming that optimistic oil prices over $70 per barrel continue unabated in the future.

Brian Gilvary - the Group CFO & Exec. Director said in the conference call:

Following a year of strong delivery and growth in 2017, we've had a good start to this year. Underlying profit for the first quarter of $2.6 billion grew by 23% relative to the previous quarter and 71% versus the same quarter last year, making this the strongest quarter for three years.

Note: Gulf of Mexico oil spill payments in 2017 were $5.2 billion, compared with $6.9 billion in 2016.

Author's Note: I have already commented on four other oil majors recently:

ChartBP data by YCharts

BP - Financial Table: The Raw Numbers

BP PLC. 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18
Total Revenues and other income in $ Billion 56.24 63.20 57.30 49.23 39.17 47.28 48.04 52.12 56.39 57.37 60.81 70.02 69.14
ChartBPMP data by YCharts

This article was written by

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Note: I am not a financial advisor. All articles are my honest opinion. It is your responsibility to conduct your own due diligence before investing or trading.

Analyst’s Disclosure: I am/we are long BP. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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