BP reported quarterly profit of $1.17 billion on Tuesday, weaker than expected and the lowest in four years, while the company promised to reset its strategy, after news broke at the weekend that investor Elliott Management had built up a stake.
BP joins other oil majors that have experienced a decline in earnings throughout 2024, following record earnings in the previous two years, as energy prices stabilised and global oil demand weakened.
But BP has underperformed its peers and pressure has mounted on CEO Murray Auchincloss to deliver change.
Its share price was around flat shortly after the market opening, up 0.6% at 467.90 pence.
On Monday, it had rallied strongly on expectations Elliott's acquisition of an undisclosed stake would enforce change.
The 61% drop in the fourth-quarter compared with the previous year made the results the weakest since the fourth quarter of 2020, when pandemic lockdowns shrank demand for oil.
"We now plan to fundamentally reset our strategy and drive further improvements in performance, all in service of growing cash flow and returns," Auchincloss said in a statement.
Auchincloss has been working towards rebuilding investor confidence in the company, following the abrupt resignation of his predecessor Bernard Looney in September 2023 for failing to disclose relationships with employees.
The company's quarterly earnings were dragged down by weaker realised refining margins. Its fourth-quarter average refining marker margin stood at $13.1 per barrel, down from last year's $18.5 per barrel.
For the current quarter, BP expects margins to remain low and a lower level of refinery turnaround activity compared with the fourth-quarter.
BP's underlying replacement cost profit, the company's definition of net income, dropped to $1.17 billion in the three months ended December 31, from last year's $2.99 billion.
That compared with forecasts of $1.26 billion in a company-provided survey of analysts and $1.20 billion, according to data complied by LSEG.
(Reuters - Reporting by Arunima Kumar in Bengaluru; Editing by Rashmi Aich and Barbara Lewis)