BP on Tuesday reported a deeper-than-expected 48% drop in net profit to $1.4 billion on weaker refining and gas trading and announced the departure of its strategy chief.
CEO Murray Auchincloss is in under pressure from activist investor Elliott to improve profitability and cut costs. He has announced plans to sell $20 billion of assets.
The British energy giant is abandoning a move to slash hydrocarbon production and boost its low-carbon business, plans pushed by strategy and sustainability chief Giulia Chierchia who announced on Tuesday that she would step down on June 1.
U.S. fund manager Elliott Investment Management had wanted a change of strategy chief as it seeks higher free cash flow through deeper cuts to spending and costs, sources familiar with the matter told Reuters.
BP's shares have lagged their peers since its foray into renewables under previous CEO Bernard Looney who brought Chierchia into BP. They were down more than 4% after Tuesday's profit miss.
BP posted a first-quarter underlying replacement cost profit, or adjusted net income, of $1.38 billion, below the $1.53 billion expected by analysts in a company-provided poll.
That was down from $2.7 billion a year earlier.
Profit at its gas and low-carbon unit was down around 40%, hit by weaker trading and lower production after asset sales.
Its customers and products business was down by around 47%.
BP said it expects to conduct a heavy refinery maintenance programme in the second quarter, which likely means lower output.
Amid an industry-wide fall in refining profitability, BP's refining margins averaged $15.20 a barrel in the first quarter, down from $20.60 a year earlier.
BP is buying back $750 million in shares for the quarter, at the low end of its guided range. That marks a slowdown from buybacks that totalled $7.1 billion last year.
It said it would spend $14.5 billion this year, around $500 million less than its previous guidance, and reiterated its $13-$15 billion target for next year and 2027.
Elliott has increased its stake in BP to just over 5%, placing it between top shareholders BlackRock and Vanguard, LSEG data shows.
(Reuters - Reporting by Shadia Nasralla; editing by Jason Neely)
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