BP reported a second-quarter profit of $2.4 billion, surpassing analyst expectations despite a decrease from the previous year. Chief Executive Officer Murray Auchincloss emphasized the company’s commitment to improving returns for investors, stating that BP “can and will do better for its investors.” The results released on Tuesday revealed that the underlying replacement cost profit fell from $2.76 billion in the same period of 2024, yet significantly exceeded the consensus estimate of $1.82 billion.
The increase in profit compared to the first quarter was driven by various factors. BP attributed the $1 billion jump to robust gas marketing and trading outcomes, improved refining margins, and stronger earnings from the customers division. However, the results faced some headwinds from declining liquids and gas prices, alongside heightened refinery turnaround activities.
In a bid to enhance shareholder returns, BP announced a dividend increase of 8.32 cents per ordinary share, marking a 4% rise. Additionally, the company revealed plans for a $750 million share buyback in the second quarter. These strategic moves come as BP faces pressure from Elliott Management, an activist hedge fund holding a 5% stake in the company, which is advocating for more aggressive cost-saving measures.
Cost-Cutting Initiatives and Future Plans
BP aims to achieve structural cost reductions of between $4 billion and $5 billion by the end of 2027, based on a 2023 baseline. The company reported having already implemented structural cost savings of $900 million for the first half of 2025, accumulating a total of $1.7 billion in savings against the baseline.
In the earnings release, Auchincloss remarked on the progress made so far, stating, “We are two quarters into a twelve-quarter plan and are laser-focused on delivery of our four key targets.” He acknowledged the encouraging early results but stressed that there is more work to be done.
Furthermore, Auchincloss and newly appointed chair Albert Manifold announced a comprehensive review of BP’s business portfolio. “We are also initiating a further cost review and, whilst we will not compromise on safety, we are doing this with a view to being best in class in our industry,” Auchincloss added. This review aligns with the company’s strategy to enhance efficiency and profitability amid a challenging market landscape.
As BP navigates its path forward, the emphasis on improving operational performance and returning value to shareholders remains a top priority. The ongoing adjustments and evaluations could position BP more favorably as it seeks to adapt to evolving market conditions and investor expectations.
