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BP (NYSE:BP) -4.1% in Tuesday’s trading, on pace for its largest percentage decrease since October 2023, after warning that weak oil trading and reduced refining margins will hurt Q2 earnings.
The company also said it expects to write down $1B-$2B in after-tax asset impairments and one-off provisions, including charges related to a plan to scale back operations at its Gelsenkirchen refinery in Germany, as well as a $500M-$700M hit in Q2 from “significantly lower realized refining margins.”
Citi analysts cut their Q2 earnings per share estimate by 9% following the report, while analysts at Jefferies expected the update to result in an earnings downgrade of as much as 20%.
BP (BP) “needs to demonstrate competence in the day-to-day running of the business and today’s update doesn’t help in that sense,” AJ Bell investment director Russ Mould said, according to Reuters.
BP’s (BP) Q2 gas trading guidance was a disappointment but the update overall was mixed, RBC Capital analysts said.
“We had modeled a strong result given the volume ramp up at Tangguh [in Indonesia] and outages elsewhere with peers, and so the average result is disappointing relative to our estimates,” RBC wrote, but stronger than expected upstream volumes offsets weakness elsewhere, as the bank lowered its Q2 net income estimate to $2.7B from $3.3B previously.