BP Plc (BP) shocked the investing world yesterday following the company’s Q1 earnings report. The company is the third-largest supplier of oil in Europe, and investors forecasted a 26 cent loss on the quarter. The company posted an EPS of $0.17, a major decline from Q1 2015 when the company’s EPS was $0.85.
BP further maintained their $0.10 dividend.
Solid refining and trading performance allowed BP to overcome analyst forecasts for a company that is still suffering from the 2010 oil explosion. The explosion cost BP hundreds of millions in Q1 alone. Revenues for the company have also slumped 30.4% over the last 12 months, falling to $39.17 billion.
Shares for the company jumped 5.4% on the news, and nearly 16 million shares were exchanged on the day.
A bright spot for a company trying to survive lower gas and oil prices, BP also announced that it will reduce capital spending from $17 billion in 2016 to $15 billion in 2017 in an effort to turn the company around.
BP’s strength puts the company on the rebound and has further helped energy ETFs receive a boost on Tuesday.
SPDR S&P International Energy Sector ETF (IPW)
IPW maintains a 9.8% allocation of BP stock, and the portfolio has 93.6% allocated to oil, gas and consumer fuels. The ETF jumped over 1.55% in early morning trading following the release of BP’s earnings.
There are over 155 securities held by the company.
The fund increased its holdings of BP stock to 10.24% of its portfolio weight following the company’s stock rising. The ETF’s first and second held stocks are Total SA (12.41%) and Royal Dutch Shell (11.12%).
iShares Global Energy ETF (IXC)
The ETF maintains 81 stocks in its basket, with BP making up just 4.3% of the fund’s assets. BP is the fund’s seventh largest asset. The oil and gas sector account for 57% of the fund’s returns, with 59.2% of the stocks in the portfolio being U.S. firms.
Following the earnings release, the fund is up over 1.2% on the day,
BP’s troubles may be far from over, but a recent report from the World Bank suggests oil prices will rise to $41 a barrel on the year, up from previous forecasts of $37 a barrel for the year. If oil can maintain its rebound, BP and the energy ETFs that have a large percentage of their assets in BP stock will perform well going into the mid-year.