BP explains boom in Q2 profit and simplification strategy
Shares in the oil major have had an outstanding month, and the new chief executive is executing her plan to deliver a ‘step change in performance’.
4th August 2026 09:18
by Victoria Scholar from interactive investor
BP (LSE:BP.) reported second-quarter underlying replacement cost profit of $5.73 billion, ahead of forecasts for $5.11 billion and up over 140% year-on-year. The company is also returning cash to shareholders by raising its dividend by 4% to 8.66 cent per share.
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The oil major delivered its strongest quarterly earnings since Russia’s invasion of Ukraine in 2022. Earnings were underpinned by the Iran war which has supported oil and gas prices and led to exceptionally strong refining margins. This however was already priced into shares when BP guided for stronger refining margins in last month's trading statement, lifting the stock to the top of the FTSE 100. However, the Middle East conflict also negatively impacted BP’s plant operations in the quarter, with less crude produced by its refineries.
Its retail business performed well, with a $0.8 billion increase in its customer quarterly underlying result thanks to higher volumes and fuel margins. Strong cash generation supported a reduction in net debt to $22.3 billion in the quarter.
Meg O’Neill, who has been CEO since April, has been looking to make her mark on the business, outlining five key priorities to deliver a ‘step change in performance’. The takeaway seems to be a focus on simplification and disciplined decision making.
She is taking further steps to streamline the business by announcing the sale of its US biogas business Archaea Energy, which has caused notable impairments, and represents its continued shift away from renewables back to its more earnings driven oil and gas centred strategy.
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To further streamline the business, BP also recently announced plans to offload its North Sea operation, the Austrian retail business, the Bay du Nord project in Canada and the Gelsenkirchen refinery in Germany.
BP shares are up over 1% today but after its recent trading announcement and Shell’s strong results last week, a lot of the positivity was already priced in. Shares in BP are up around 20% over the last month, making it the third-best performer on the FTSE 100 over the period. Shareholders have enjoyed a strong run so far in 2026 with shares outperforming the large cap index to log a gain of almost 30% already.
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