BP's (BP.L), opens new tab first-quarter earnings plunged by 40% to $2.7 billion, missing forecasts after lower energy prices and a U.S. refinery outage offset increased oil and gas production.

The London-based company held its dividend at 7.27 cents per share and maintained the rate of its share buyback programme at $1.75 billion over the next three months, similar to the previous quarter.

Profit fell 5% short of analyst forecasts, denting efforts by CEO Murray Auchincloss to steady the company after a bruising period that followed the abrupt resignation of predecessor Bernard Looney in September.

Auchincloss, who was head of finances under Looney, has vowed to simplify BP's operations and cut costs in the face of investor doubts over plans to reduce the company's focus on oil and gas and expand a low-carbon business.

BP on Tuesday introduced a target to deliver cash cost savings of at least $2 billion by the end of 2026 relative to 2023.

Shares in the company were down 1.9% at 1450 GMT, compared with a 0.5% drop for the European energy index (.SXEP), opens new tab.

First-quarter underlying replacement cost profit, the company's definition of net income, missed the $2.87 billion consensus forecast from analysts polled by the company and was well short of a $3 billion profit in the previous quarter and $5 billion a year earlier.

BP beat earnings forecasts in the previous quarter but had missed them in the previous two.

The results reflected lower energy prices and the impact of the outage at its Whiting refinery in Indiana, which was partially offset by a strong oil trading result, higher refining margins and oil and gas output.

Oil and gas production was up 2.1% from a year earlier at 2.38 million barrels of oil equivalent per day on the back of field start-ups in Azerbaijan and the United States.

"We're seeing good operational momentum," Auchincloss told Reuters.

BP's cashflow was down 34% at $5 billion after restocking of diesel and gasoline stocks ahead of summer, Auchincloss said.

The company's debt rose to $53 billion while its debt-to-market capitalisation ratio rose to 22% from 19.7% in the previous quarter.

The earnings miss was a result of higher tax rate and interest expenses versus expectations, said HSBC analyst Kim Fustier.

The miss "is not what BP bulls may have been hoping for, especially after Shell's impressive 20% beat last Thursday" on the back of strong trading and refining, Fustier said.

Rival Exxon Mobil (XOM.N), opens new tab also missed earnings forecasts, while Chevron (CVX.N), opens new tab and TotalEnergies (TTEF.PA), opens new tab both met expectations. All three reported sharp drops in profit due to a lower natural gas prices.

Saudi Arabia's state-owned oil giant Aramco (2222.SE), opens new tab on Tuesday reported first-quarter net profit of $27.3 billion, down 14% from a year earlier.

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