By Dhirendra Tripathi
Investing.com – BP ADRs (NYSE:BP) were up 5.7% in premarket trading Tuesday as the company followed its European rivals by announcing a higher dividend and increasing its buyback program
The company made its announcements after returning to profit in the second quarter, beating expectations as a strong economic rebound across much of the world this year sent crude oil prices to their highest since 2018.
BP posted underlying replacement cost profit, used as proxy for net profit, of $2.79 billion. That compared with a loss of $6.68 billion over the same period a year ago.
Adjusted earnings per share were 83 cents, higher than the estimated 58 cents.
Sales and other operating revenue came at $36.46 billion, 72% higher than $21.26 billion in the second quarter of 2020. This was below analysts’ expectations of $38.53 billion.
The company said it will annually increase its dividend by 4% through 2025, starting from the second quarter. It had slashed payouts last year to conserve cash as the pandemic took world prices to unprecedented lows
BP also said it expects to deliver buybacks of around $1 billion per quarter. The targets for dividend and buyback assume crude prices at $60 per barrel.
Brent Oil Futures traded 0.4% higher at $73.31 per barrel Tuesday. Crude Oil WTI Futures was at $71.66.