BP p.l.c. (BP) Q4 2025 Earnings Call Prepared Remarks Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed picture with strong cash flow and lower net debt, yet faces significant challenges such as weaker oil prices, high tax rates, and operational risks. The suspension of share buybacks and divestment impacts further dampen sentiment. Despite some positive elements like cost reductions and improved reserves, the overall financial and strategic outlook is cautious, leading to a negative stock price prediction.
Key Financial Performance
Total underlying replacement cost profit (2025) $7.5 billion, enabled by record high upstream plant reliability and refining availability, partially offsetting market headwinds.
Operating cash flow (2025) $24.5 billion, including a $2.9 billion adjusted working capital build in the year.
Capital expenditure (2025) 10% reduction compared with 2024, with organic CapEx reduced to $13.6 billion.
Shareholder distributions (2025) Around 30% of operating cash flow, with the Board deciding to suspend the share buyback to allocate excess cash to strengthen the balance sheet.
Reserves replacement ratio (2025) 90%, up from an average of around 50% in the prior 2 years.
Divestments (2025) Over $11 billion completed and announced, more than halfway towards the $20 billion disposal program.
Adjusted free cash flow (2025) Increased by around 55% on a price-adjusted basis.
Net debt (end of 2025) $800 million lower than at the end of 2024.
Structural cost reduction (2025) $2.8 billion delivered out of the $4 billion to $5 billion target since the start of the program.
Return on average capital employed (2025) Around 14% on a price-adjusted basis, up from around 12% in 2024.
Group underlying replacement cost profit before interest and tax (Q4 2025) $4.4 billion, impacted by a weaker price environment.
Group underlying replacement cost profit (Q4 2025) $1.5 billion, with impairments of around $4 billion after tax recognized.
Operating cash flow (Q4 2025) $7.6 billion, including about $900 million adjusted working capital release.
CapEx (Q4 2025) $4.2 billion, with organic CapEx at $3.5 billion, $700 million lower year-on-year.
Divestment and other proceeds (Q4 2025) $3.6 billion, bringing the full year to $5.3 billion.
Net debt (Q4 2025) Reduced to $22.2 billion.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
New major projects: Started up 7 new major projects in 2025, setting a record in upstream plant reliability.
Bumerangue discovery: Largest discovery in 25 years with an estimated 8 billion barrels of liquids in place. Plans for an appraisal program to start by the end of 2026.
Castrol divestment: Concluded strategic review and agreed to sell a 65% shareholding, with expected net proceeds of $6 billion to reduce net debt.
Disposal program: Completed and announced over $11 billion of divestments, progressing towards a $20 billion disposal target.
Operational performance: Achieved record high upstream plant reliability and refining availability, with broadly flat underlying production versus 2024.
Cost reductions: Delivered $2.8 billion of structural cost reductions, with a target increase to $5.5-$6.5 billion by 2027.
Capital discipline: Reduced capital expenditure by 10% compared to 2024, with organic CapEx at $13.6 billion.
Portfolio high-grading: Took deliberate decisions to manage growth pace in biogas and renewables, focusing on maximizing returns.
Shareholder distributions: Suspended share buyback to allocate excess cash towards strengthening the balance sheet.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Safety incidents: Four fatalities occurred in 2025 within the U.S. retail business, including two incidents involving roadside assistance near active traffic lanes. This highlights operational safety risks and the need for stringent safety measures.
Weaker oil price environment: The company faced financial headwinds due to a weaker oil price environment, impacting earnings and profitability.
Impairments in transition businesses: Impairments of around $4 billion after tax were recognized, primarily in biogas and renewables, reflecting challenges in managing growth and portfolio optimization in transition businesses.
Lower gas and low carbon energy realizations: The underlying result in this segment declined due to lower realizations, indicating market and operational challenges in the energy transition.
Production and operational challenges: Lower upstream production guidance for 2026 and impacts from production mix and equity income suggest operational risks.
Refinery incident: A temporary incident at the Whiting refinery affected throughput and contributed to weaker results in the Products segment.
High tax rates: The underlying effective tax rate increased to 42% for the full year, which could pressure net earnings.
Divestment impacts: Earnings impacts are expected from completed and announced divestments, such as the Netherlands mobility & convenience business.
Net debt fluctuations: Net debt is expected to increase in the first half of 2026 before falling in the second half, reflecting financial management challenges.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
First Quarter 2026 Guidance: Reported upstream production is expected to be broadly flat. Customers segment is expected to experience seasonally lower volumes. Products segment is expected to see lower industry refining margins, partly offset by a lower level of refinery turnaround activity. CapEx is expected to be broadly flat compared to the fourth quarter of 2025.
Full Year 2026 Guidance: Reported upstream production is expected to be slightly lower, while underlying production is expected to be broadly flat, which is higher than the previous year's expectation. Oil production and operations are expected to be broadly flat, while gas and low carbon energy production is expected to be lower. Customers segment is expected to see lower underlying operating expenditure due to structural cost reductions, partly offset by the earnings impact of completed and announced divestments. Products segment is expected to experience a significantly lower level of turnaround activity. Capital expenditure is projected to be in the range of $13 billion to $13.5 billion, weighted to the first half of the year. Divestment proceeds are expected to range between $9 billion and $10 billion, with around $6 billion from the announced Castrol transaction. Total proceeds are expected to be significantly weighted to the second half of the year. Net debt is expected to increase in the first half of 2026 before falling significantly in the second half.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Fourth Quarter Dividend: $0.0832 per ordinary share announced, contributing to shareholder distributions of around 30% of 2025 operating cash flow.
Share Buyback Program: The Board has decided to suspend the share buyback program and fully allocate excess cash to accelerate strengthening of the balance sheet.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Review of Unclear Management Responses
A:
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
CFO Director
Chief Financial
Director PM
EST Group
Financial Officer
Group Head
Head Investor
Hello interest
Investor Relations
Katherine Thomson
London presentation
Marshall Group
Officer video
PM EST
Relations Hello
Relations Katherine
Results Chief
SEC filing
Thomson CFO
UK SEC
afternoon London
announcement SEC
detail document
detail video
document website
estimate plan
expectation result
factor slide
filing detail
presentation progress
result afternoon
video result
video statement
website hello
BP Transcript
BP p.l.c. (BP) Q4 2025 Earnings Call Prepared Remarks Transcript
Unknown2-13
The earnings call presents a mixed picture with strong cash flow and lower net debt, yet faces significant challenges such as weaker oil prices, high tax rates, and operational risks. The suspension of share buybacks and divestment impacts further dampen sentiment. Despite some positive elements like cost reductions and improved reserves, the overall financial and strategic outlook is cautious, leading to a negative stock price prediction.
BP p.l.c. (BP) Q4 2025 Earnings Call Transcript
Positive2-10
The earnings call presents strong operational performance with increased production, reliable plants, and significant shareholder distributions. Despite impairments in transition businesses, the strategic focus on balance sheet strengthening and disciplined capital allocation is evident. The Q&A reveals confidence in dividend growth and cost reduction strategies, though the suspension of the buyback program and lack of specific guidance on Bumerangue create some uncertainty. Overall, the positive aspects, including upgraded production guidance and robust cash flow distribution, outweigh the negatives, leading to a positive sentiment.
BP p.l.c. (BP) Q3 2025 Earnings Call Transcript
Positive11-4
BP's earnings call indicates strong financial performance with record exploration success, strategic divestments, and increased shareholder returns. The Bumerangue discovery is a significant positive, and AI deployment boosts operational efficiency. The Q&A section revealed some uncertainties, but overall sentiment is positive due to optimistic guidance, strategic focus, and improved financial health.
BP p.l.c. (BP) Q2 2025 Earnings Call Transcript
Positive8-5
The earnings call summary indicates strong financial performance with a 50% increase in underlying earnings, successful divestments, and significant cost reductions. Shareholder returns are enhanced with a dividend increase and a $750 million buyback. Despite some operational challenges and market volatility, the strategic progress and exploration successes, including a significant Brazilian discovery, are positive. The Q&A reveals confidence in handling CO2 concerns and production outlook, reinforcing the positive sentiment. Overall, the positive financial metrics and strategic advancements suggest a likely stock price increase in the short term.
BP Slides
BP Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
