Watch Jim Cramer Call BP 'Dumb as Plywood'
Shares of BP marked sharp gains despite the energy giant having reported a massive second quarter loss and cutting its quarterly dividend in half. Jim Cramer took to Twitter to share his advice. “Don’t get sucked in,” Cramer tweeted.
BP’s second-quarter underlying replacement cost profit, which it uses as a proxy for its net earnings results, came in at a loss of $6.7 billion, compared to a profit of $800 million in the first quarter of the year.
The total reported loss for the quarter came in at $16.8 billion, which included a post-tax charge of $10.9 billion for non-operational costs.
BP also cut its dividend to 5.25 cents, halving from the 10.5 cents distributed in the first quarter.
So why are investors finding reason to be so optimistic?
BP announced a new strategy to shift to clean energy as part of its goal to be a net-zero-carbon company by 2050 or earlier. It said it plans to raise its low-carbon to about $5 billion a year within 10 years.
“We believe that what we are setting out today offers a compelling and attractive long-term proposition for all investors — a reset and resilient dividend with a commitment to share buybacks; profitable growth; and the opportunity to invest in the energy transition,” BP CEO Bernard Looney said in the earnings release.
BP also committed to lowering oil and gas production by 40% compared to current levels within 10 years.
But is going green enough to keep the stock in the green?
While Cramer applauded the effort, he said cutting the dividend after raising it in February was a "stupid thing," calling the company "dumb as plywood."
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