Weekly Market Update – Week Ending 09/02/24

Earnings season continued at pace this week with some of the FTSE 100 heavyweights updating investors.

On Tuesday, energy giant BP reported its second-highest annual profit in more than a decade, with earnings of $13.8 billion in 2023. This was, however, a decrease from the record $27.7 billion in 2022, with the fall in profit attributed to a decline in oil prices over the period. Having peaked around $120 a barrel soon after Russia’s invasion of Ukraine started, oil currently trades close to $80 a barrel.

Despite the reduced oil prices, BP remains committed to returning cash to shareholders, with plans for $1.75 billion in share buybacks in the first three months of 2024 and a total commitment of $3.5 billion over the first half of the year. They also announced the quarterly dividend would be increased by some 10%. The bigger buyback and dividend hike beat market expectations, causing the shares to gain around 6% on the day.

On Thursday, Unilever shares were positive following the release of its full-year earnings. The maker of many of the world’s most popular household products revealed underlying sales growth of 7% over the last 12 months, although pretax profits fell 9.7% to €9.34bn in 2023 from €10.34bn in 2022. The company announced a €1.5bn share buyback during 2024 and declared a 4th quarter dividend of €0.42, unchanged from a year earlier. By consistently increasing or maintaining its dividend payout (for over 20 years!), Unilever continues to earn the trust and loyalty of income-seeking investors..

 
John Naylor, Chartered FCSI – Head of Investment Committee