BP delivered strong results in the first quarter of the year, as the price of oil marched higher. Expectations for the Q2 2021 are high, with market participants looking at an EPS $0.60 to be announced.
On 3 August BP will announce its second quarter results and host a Q&A session. The market expects an EPS of $0.60, and judging by the rally in oil and gas prices in the second quarter, the chances are that BP may exceed that.
But that does not mean that the BP stock price is out of the woods. The energy sector was in decline long before the COVID-19 pandemic started.
In the case of BP, the stock price peaked in the second half of 2007 and has been trending downwards ever since. The series of lower highs spells trouble for long-term investors, and the technical picture might turn bullish if the BP stock price breaks that series.
In recent years, energy stocks have tried to diversify their operations. More precisely, they are turning to green alternatives as much as possible as a new objective.
Recently, BP had made a potential bid for a $14 billion investment in a Scottish offshore wind lease. It also delivered the first carbon-offset LNG cargo to Sempra’s Mexico terminal.
But the bulk of its revenues comes from refining, supplying and trading oil products and natural gas. Therefore, movements in the commodity markets, especially in the oil market, are a key driver for BP’s stock price.
What Are the Expectations for Q2 2021 Earnings?
Besides the EPS $0.60, the market expects annual revenue at $229.24 billion. The industry is in decline as shown by the yearly revenue growth of -24.15%, lower than the sector median of -19.45%.
BP operates at a gross profit margin of 18% and it is a dividend-paying company. On the New York Stock Exchange, BP stock price is up 16.52% this year.