BP PLC (LSE:BP.) shares struggled for direction after the oil giant reported its lowest quarterly profit for four years but promised to "fundamentally reset" its strategy.
Analysts said profits were better than expected, though, and highlighted that a strategy day on 26 February was unboutedly a key event, especially now with activist Elliott on the shareholder register.
Operating earnings of $4 billion were 6% above consensus forecasts, UBS said, with a 16% beat in Oil Production & Operations largely offset by a miss in Customers and Products.
UBS noted that BP said it intends to review capital expenditure as well as share buybacks, possibly revealing this at the event later this month, while guidance for the first quarter of 2025 was for slightly lower upstream production, $3 billion of disposals, and earnings growth coming from the Customers division.
As for the strategy day, UBS said the management has several levers it could pull to improve sentiment.
The Q4 results, said market analyst Neil Wilson at TipRanks, show that activist investor Elliott "has a point".
He said the timing of the revelation about Elliott's stake and today's results "is no coincidence".
"This is being scripted so we can expect big changes," Wilson said, adding that the process of shifting from the green bets made by previous CEO Bernard Looney "had already begun but Elliott has kicked up a notch or seven".
Derren Nathan, head of equity research at Hargreaves Lansdown, says BP profits were dragged down by "a perfect storm of bad news".
He says an expected $3 billion of divestments from non-core operations in 2025 will be welcome, but the "burning question" is one of capital allocation and strategy that Auchincloss promises to unveil two weeks from tomorrow.