BP is scheduled to report results for the third quarter on Friday. Here is what you need to know.
PROFIT FORECAST: BP's underlying replacement-cost profit is expected at $7.33 billion, according to a company-compiled consensus. It booked $2.21 billion in the same period last year. Underlying replacement-cost profit is BP's main profit metric and is similar to net income reported by U.S. oil companies.
Shares in the British energy major have risen 46% over the year to date but have underperformed against their European peers.
--BP is due to update its strategy in December, giving new Chief Executive Meg O'Neill an opportunity to stamp her mark on the company. It is therefore unlikely there will be much forward-looking commentary on capital allocation or broader portfolio priorities on Friday.
--BP has made cutting net debt a priority and is using the elevated oil and gas prices to its advantage. Net debt is expected to come down to between $13.5 billion and $14.5 billion, compared with $22.3 billion at the end of the second quarter.
--BP isn't expected to restart its quarterly share buyback despite the cash boost. "Faster-than-expected deleveraging does not, on its own, make an immediate restart of buybacks the right decision," Barclays analyst Lydia Rainforth wrote in a note. Management is likely to use its December strategy update to explain how it will grow sustainable cash flow rather than just marking the return of buybacks, she said.
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