BP p.l.c. (NYSE:BP) reported better-than-expected earnings for the second quarter of 2025, although revenue came in below Wall Street expectations. The energy company posted adjusted earnings of 90 cents per American depositary share, topping the consensus estimate of 67 cents.
Total revenue dropped to $46.63 billion from $47.30 billion in the same quarter last year, falling short of analyst projections of $48.52 billion. GAAP profit attributable to shareholders was $1.63 billion, reversing a year-ago loss of $129 million.
Underlying replacement cost (RC) profit for the quarter totaled $2.35 billion, compared with $2.76 billion a year ago and $1.38 billion in the previous quarter.
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Oil Production & Operations recorded replacement cost profit before interest and tax of $1.9 billion. After adjusting for $300 million in impairments and other items, the segment’s underlying profit rose to $2.3 billion. Results reflected lower realized prices and increased depreciation but were supported by higher production from major project ramp-ups and improved turnaround efficiency.
Gas & Low Carbon Energy generated $1 billion in RC profit before interest and tax. After $400 million in adjustments, underlying profit reached $1.5 billion. Compared with the previous quarter, results improved on higher volumes, though weaker gas prices and increased depreciation and exploration costs weighed on performance.
Customers & Products posted $1 billion in RC profit before interest and tax. On an underlying basis, profit increased to $1.5 billion after adjusting for $600 million. The gain was driven by seasonal demand, strong fuels and refining margins, and a solid oil trading performance. Turnaround activity in refining moderated the growth. Lubricants remained steady, while the convenience and mobility businesses expanded in developing markets.
Operating cash flow was $6.27 billion, up from $2.83 billion in the prior quarter. Capital expenditures totaled $3.36 billion, and divestments and other proceeds were $1.36 billion. BP ended the quarter with $26.04 billion in net debt.
Post-tax inventory holding losses reached $407 million, and impairments were estimated between $500 million and $1.5 billion, partially offset by favorable fair value accounting effects.
“This has been another strong quarter for bp operationally and strategically. We are delivering on our plan to grow the upstream and focus the downstream with reliability across both at >96%. So far this year we’ve brought five new oil and gas major projects onstream, sanctioned four more, and made ten exploration discoveries, including the significant discovery in Bumerangue block in Brazil,” commented Murray Auchincloss CEO of BP.
“Expected proceeds from completed or announced divestments have reached around $3 billion for the year, and we have now delivered around $1.7 billion of structural cost reductions since the start of our programme,” he added.
Outlook
Looking to the third quarter, BP expects reported upstream production to decline slightly. Customer volumes are projected to rise due to seasonal trends, while product turnaround activity is anticipated to ease. Income taxes paid are expected to increase by about $1 billion due to the timing of installment payments.
The company maintained its outlook for the full year 2025. BP expects reported upstream production to decline and underlying production to be slightly below 2024 levels.
Oil output is expected to stay flat, while gas and low-carbon production are projected to decrease. Divestment and other proceeds are projected between $3 billion and $4 billion, mostly in the fourth quarter.
Shareholder Returns
BP announced a quarterly dividend of 8.32 cents per ordinary share, a 4% increase. The company also launched a $750 million share buyback program, reaffirming its commitment to return 30% to 40% of operating cash flow to shareholders through buybacks and dividends.
Earlier this month, BP flagged a potential drag on profits due to falling crude prices. Volatility in oil benchmarks could impact upcoming earnings even as the company continues its capital return strategy and energy transition plans.
Related ETFs: Energy Select Sector SPDR Fund (NYSE:XLE), iShares Global Energy ETF (NYSE:IXC).
Price Action: BP shares were trading higher by 1.79% at $33.07 premarket at last check Tuesday.
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