The share price of Brazil's state-run energy giant Petroleo Brasileiro S.A., or Petrobras (PBR - Free Report) crashed 8.7% Thursday after announcing third-quarter loss of $5,380 million, wider than the $1,062 million loss incurred in the year-earlier quarter. Loss per ADR came in at 82 cents (1 ADR = 2 shares), compared with the year-ago loss of 18 cents.
Moreover, the struggling oil producer’s performance could not match the Zacks Consensus Estimate of 9 cents profit amid huge asset write-downs, a further fall in global crude prices, unfavorable exchange rate fluctuations and unexpected costs related to a voluntary retirement program.
Petrobras’ net operating revenues of $21,693 million came below the Zacks Consensus Estimate of $23,120 million and were 6% less than the year-earlier level of $23,179 million.
The Rio de Janeiro-headquartered company’s total oil and gas production during the third quarter reached 2,869 thousand oil-equivalent barrels per day (MBOE/d), up from 2,800 MBOE/d in the same period of 2015. Brazilian oil and natural gas production – constituting 95% of the overall output – increased 4% to 2,722 MBOE/d but international volumes fell 22% year over year to 147 MBOE/d.
However, gains on the production front could not make up for the sharp downfall in international commodity prices, the net effect resulting in stable year-over-year gross profit for the upstream (or exploration & production) segment.
During the three months ended Sep 30, 2016, the average sales price of oil in Brazil rose 5% from the year-earlier period to $41.77 per barrel. However, average sales price of international oil was down 24% year over year to $42.38 per barrel. Regarding natural gas, average international sales price fell 21% from the third quarter of 2015.
Capital Spending & Balance Sheet
During the three months ended Sep 30, 2016, Petrobras’ capital investments and expenditures totaled $3,776 million, sharply less than the $5,443 million incurred in the year-ago period. At the end of the quarter, the company had cash and cash equivalents of $21,582 million and net debt of $100,291 million. Net debt-to-capitalization ratio was approximately 55%.
Zacks Rank & Stock Picks
Petrobras currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the energy sector are Ultra Petroleum Corp. , EQT Midstream Partners L.P. and Helix Energy Solutions Group Inc. (HLX - Free Report) .
Ultra Petroleum is likely to witness year-over-year earnings growth of 425.8% in the current year. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
EQT Midstream is projected to witness year-over-year earnings growth of almost 12% in the current year. It has a Zacks Rank #2 (Buy).
Helix Energy posted an average positive earnings surprise of 56.42% in the last four quarters. The company has a Zacks Rank #2.
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The share price of Brazil's state-run energy giant Petroleo Brasileiro S.A., or Petrobras (PBR - Free Report) crashed 8.7% Thursday after announcing third-quarter loss of $5,380 million, wider than the $1,062 million loss incurred in the year-earlier quarter. Loss per ADR came in at 82 cents (1 ADR = 2 shares), compared with the year-ago loss of 18 cents.
Moreover, the struggling oil producer’s performance could not match the Zacks Consensus Estimate of 9 cents profit amid huge asset write-downs, a further fall in global crude prices, unfavorable exchange rate fluctuations and unexpected costs related to a voluntary retirement program.
Petrobras’ net operating revenues of $21,693 million came below the Zacks Consensus Estimate of $23,120 million and were 6% less than the year-earlier level of $23,179 million.
The Rio de Janeiro-headquartered company’s total oil and gas production during the third quarter reached 2,869 thousand oil-equivalent barrels per day (MBOE/d), up from 2,800 MBOE/d in the same period of 2015. Brazilian oil and natural gas production – constituting 95% of the overall output – increased 4% to 2,722 MBOE/d but international volumes fell 22% year over year to 147 MBOE/d.
However, gains on the production front could not make up for the sharp downfall in international commodity prices, the net effect resulting in stable year-over-year gross profit for the upstream (or exploration & production) segment.
During the three months ended Sep 30, 2016, the average sales price of oil in Brazil rose 5% from the year-earlier period to $41.77 per barrel. However, average sales price of international oil was down 24% year over year to $42.38 per barrel. Regarding natural gas, average international sales price fell 21% from the third quarter of 2015.
Capital Spending & Balance Sheet
During the three months ended Sep 30, 2016, Petrobras’ capital investments and expenditures totaled $3,776 million, sharply less than the $5,443 million incurred in the year-ago period. At the end of the quarter, the company had cash and cash equivalents of $21,582 million and net debt of $100,291 million. Net debt-to-capitalization ratio was approximately 55%.
Zacks Rank & Stock Picks
Petrobras currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the energy sector are Ultra Petroleum Corp. , EQT Midstream Partners L.P. and Helix Energy Solutions Group Inc. (HLX - Free Report) .
Ultra Petroleum is likely to witness year-over-year earnings growth of 425.8% in the current year. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
EQT Midstream is projected to witness year-over-year earnings growth of almost 12% in the current year. It has a Zacks Rank #2 (Buy).
Helix Energy posted an average positive earnings surprise of 56.42% in the last four quarters. The company has a Zacks Rank #2.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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