BP announced Tuesday that it would stop a program to buy back its own stock and eliminate a target for investor payouts as the oil and gas company works to shore up its finances.
Interim CEO Carol Howle said during BP’s fourth-quarter earnings call that the company would halt its $750 million quarterly share buyback program and use excess cash to “accelerate strengthening of our balance sheet.”
By buying back its own shares, a company can sometimes boost its stock price because each share represents a larger stake in the business. But Howle said BP will retire its guidance of giving 30 percent to 40 percent of BP’s operating cash flow to shareholders.
“The board and the leadership team are aligned around our goal to become a simpler, stronger and more valuable company and, in turn, grow shareholder returns,” Howle told analysts and investors Tuesday. “We’re in action. We do have more to do, and we can and will do better for our shareholders.”
