TLDR
- BP posted Q4 profit of $1.54 billion, matching expectations but down from $2.21 billion in Q3 2025 due to lower oil prices and refinery issues.
- The company suspended share buybacks to allocate excess cash toward strengthening its balance sheet as crude prices remain weak.
- BP shares dropped 5% after the announcement, trading near the bottom of European markets.
- Full-year 2025 net profit fell to $7.49 billion from nearly $9 billion in 2024, missing analyst expectations.
- BP raised its cost-reduction target to $5.5-6.5 billion by end of 2027 and set 2026 capital expenditure at $13-13.5 billion.
BP shares tumbled Tuesday morning after the British oil giant announced it would halt share buybacks and redirect excess cash to shore up its balance sheet. The London-listed energy firm posted fourth-quarter underlying replacement cost profit of $1.54 billion, meeting analyst expectations but reflecting the ongoing pressure from weak crude prices.
$BP is halting $750M share buybacks and pulling its guidance to return 30% to 40% of operating cash flow to shareholders, saying it needs to shore up the balance sheet. BP kept its $14B to $18B net debt target for end 2027. pic.twitter.com/N9wT9LKM6L
— Wall St Engine (@wallstengine) February 10, 2026
The stock dropped 5.4% during morning trading, placing it near the bottom of the pan-European Stoxx 600 index. BP’s U.S.-listed shares fell 6% in pre-market trading as investors reacted to the buyback suspension.
BP’s board decided to suspend the share buyback program and fully allocate excess cash “to accelerate strengthening” of its balance sheet. The company’s previous buyback was $750 million, announced alongside third-quarter results in November.
The Q4 profit of $1.54 billion represented a decline from $2.21 billion in the third quarter. Lower upstream realizations, unfavorable production mix, and reduced refinery throughputs drove the decrease.
A temporary outage at the Whiting refinery and seasonally lower customer volumes also weighed on results. For the fourth quarter, BP announced a dividend of 8.320 cents per ordinary share.
Full-year 2025 net profit came in at $7.49 billion, missing analyst expectations of $7.58 billion. That marked a drop from nearly $9 billion in 2024.
Industry Faces Oil Price Headwinds
BP’s rivals are grappling with similar challenges. Shell and Equinor both reported weaker quarterly earnings last week, citing lower crude prices among other factors.
Oil prices posted their biggest annual loss since the Covid-19 pandemic in 2025. Oversupply concerns have ratcheted up pressure on Big Oil’s commitment to shareholder returns.
Equinor announced it would slash share buybacks to $1.5 billion this year from $5 billion last year. The Norwegian energy company is also trimming investments in renewables and low-emission energy projects.
Shell kept its buybacks steady at $3.5 billion, marking the firm’s 17th consecutive quarter of $3 billion or more in buybacks. The contrast highlights different strategic approaches to navigating the downturn.
Cost Cuts and Leadership Transition
BP is streamlining operations to counter ongoing challenges. Interim CEO Carol Howle said the company made progress on four primary targets: growing cash flow and returns, reducing costs, and strengthening the balance sheet.
“We have made progress against our four primary targets but know there is more work to be done, and we are clear on the urgency to deliver,” Howle stated. The company increased its structural cost-reduction target to $5.5-6.5 billion by end of 2027, up from the previous target of up to $5 billion.
BP set its 2026 capital expenditure budget at $13-13.5 billion, reflecting the lower end of its guidance range. Fourth-quarter net debt came in at $22.18 billion, down from around $23 billion in the same period last year.
Operating cash flow for Q4 reached $7.6 billion, up from $7.43 billion a year ago. Woodside Energy boss Meg O’Neill is scheduled to take the reins as CEO on April 1, following Murray Auchincloss’ decision to step down late last year.
Wall Street analysts maintain a Hold consensus rating on BP stock based on five Holds, three Buys, and one Sell. The average price target of $40.31 suggests roughly 3% upside potential from current levels, with the stock offering a dividend yield of 5.6%.
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