BP p.l.c. (NYSE:BP) and Shell plc (NYSE:SHEL) both posted big profit jumps this quarter, mainly due to the same Iran-war-driven surge in oil and gas prices that already drew a public attack from President Trump on Exxon and Chevron for making "too much money." However, the two major European energy companies are telling very different stories underneath that shared huge profit. BP's profit more than doubled as new CEO Meg O'Neill pushes an aggressive turnaround. She has openly admitted the company has "not delivered consistently" in recent years.
By contrast, Shell plc (NYSE:SHEL) just posted its best quarter since 2022 while staying the steady course it has followed for years. This marks its 19th straight quarter of buybacks worth at least $3 billion. This makes you question: is BP's admission of past failure, paired with aggressive restructuring, the right way to catch up with steadier rivals like Shell?
Or does Shell's consistency prove BP's dramatic reset was never actually necessary? Profit hit $5.73 billion, beating the $5.11 billion analysts expected and more than doubling from a year earlier. BP p.l.c. (NYSE:BP) raised its dividend 4% and cut net debt to $22.25 billion from $25.3 billion, putting it on track to hit its long-term debt target early.
O'Neill laid out a clear five-point turnaround plan. Citi said BP has lost its unwanted status as the most indebted of the major oil firms. However, O'Neill herself admitted BP has "written off too much value" and that its "costs and liabilities are not resilient enough" for a low-price environment.
The company is still selling billions in assets, including its U.S. biogas business, its North Sea operations, and its Austrian retail unit, just to fund the turnaround. Total liabilities remain around $40 billion, which O'Neill herself called too high. The stock actually fell about 2% on earnings day, even with the beat, as oil prices dropped on hopes of a U.S.-Iran deal.
BP also went through boardroom turmoil this year, removing its chairman over governance concerns. Adjusted earnings came in at $9.84 billion, beating the $8.92 billion estimate and marking Shell plc (NYSE:SHEL)'s best quarter since 2022. Net debt fell sharply to $41.75 billion from $52.6 billion, and Shell maintained its 19th consecutive buyback of at least $3 billion.
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