Petrobras (PBR - Free Report) announced first-quarter earnings per ADS of 16 cents, missing the Zacks Consensus Estimate of 22 cents. The weaker-than-expected results can be attributed to soft contribution from both the upstream and downstream segments. The bottom line also deteriorated from the year-earlier earnings of 32 cents.
Brazil’s state-run energy giant reported revenues of $21,229 million, lagging the Zacks Consensus Estimate of $21,645 million and the year-earlier sales of $22,958 million.
Let's take a deeper look at the recent performances of the company's two main segments: Upstream (Exploration & Production) and Downstream (or Refining, Transportation and Marketing).
Upstream: The Rio de Janeiro-headquartered company’s total oil and gas production during the first quarter came in at 2,539 thousand oil-equivalent barrels per day (MBOE/d)—comprising 80% liquids — down from 2,681 MBOE/d in the corresponding period of 2018.Brazilian oil and natural gas production — constituting 97% of the overall output — decreased 4.7% from first-quarter 2018 to 2,461 MBOE/d.
In addition to the output decline, Petrobras also bore the brunt of weak oil price realizations. During the quarter, oil price realizations came in at $63.20, down 5% from the year-earlier figure of $66.76 per barrel. Consequently, the segment’s revenues declined from $12,550 million in the prior-year quarter to $11,384 million. Lower production, weaker realized prices and higher operating costs resulted in a 24%deterioration in the segment’s profits to $2,689 million from the year-ago figure of $3,556 million.
Downstream: Revenues from the segment summed $16,136 million, lower than the year-ago figure of $17,060 million. Petrobras' downstream earnings also declined 46% from the year-ago quarter to $506 million, owing to weaker oil products sales margins.
Costs: During the period, Petrobras’ sales, general and administrative expenses were $616 million, lower than the year-ago period’s 660 million. Selling expenses also fell 13.8% from a year ago to $1,097 million.
Financial Position: During the three months ended Mar 31, 2019, Petrobras’ capital investment and expenditure totaled around $2,337 million, 24% lower than $3,067 million incurred in the year-ago period.
While Petrobras generated positive free cash flow for the 16th consecutive quarter, the metric declined to $3,212 million from $4,005 million recorded in the year-ago period. Adjusted EBITDA also declined 8% y/y to $7,294 million.
At the end of the quarter, the company had net debt of $95,525 million, increasing from $81,447 million a year ago. Net debt-to-capitalization ratio increased to 56% from 49% a year ago. Petrobras ended the first quarter with cash and cash equivalents of $9,361 million.
Zacks Rank and Key Picks
Petrobras currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Meanwhile, investors interested in the energy space can consider some better-ranked players such as:
Devon Energy Corporation (DVN - Free Report) : Devon’s 2019 earnings are expected to grow 68.2% on a year-over-year basis.
Repsol SA (REPYY - Free Report) : Repsol delivered average positive earnings surprise of 8.98% in the trailing four quarters.
Bonanza Creek Energy, Inc. : The company delivered average positive earnings surprise of 3.99% in the trailing four quarters. Bonanza Creek’s 2019 revenues are expected to grow 23.1% y/y.
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Petrobras (PBR - Free Report) announced first-quarter earnings per ADS of 16 cents, missing the Zacks Consensus Estimate of 22 cents. The weaker-than-expected results can be attributed to soft contribution from both the upstream and downstream segments. The bottom line also deteriorated from the year-earlier earnings of 32 cents.
Brazil’s state-run energy giant reported revenues of $21,229 million, lagging the Zacks Consensus Estimate of $21,645 million and the year-earlier sales of $22,958 million.
Let's take a deeper look at the recent performances of the company's two main segments: Upstream (Exploration & Production) and Downstream (or Refining, Transportation and Marketing).
Upstream: The Rio de Janeiro-headquartered company’s total oil and gas production during the first quarter came in at 2,539 thousand oil-equivalent barrels per day (MBOE/d)—comprising 80% liquids — down from 2,681 MBOE/d in the corresponding period of 2018.Brazilian oil and natural gas production — constituting 97% of the overall output — decreased 4.7% from first-quarter 2018 to 2,461 MBOE/d.
In addition to the output decline, Petrobras also bore the brunt of weak oil price realizations. During the quarter, oil price realizations came in at $63.20, down 5% from the year-earlier figure of $66.76 per barrel. Consequently, the segment’s revenues declined from $12,550 million in the prior-year quarter to $11,384 million. Lower production, weaker realized prices and higher operating costs resulted in a 24%deterioration in the segment’s profits to $2,689 million from the year-ago figure of $3,556 million.
Downstream: Revenues from the segment summed $16,136 million, lower than the year-ago figure of $17,060 million. Petrobras' downstream earnings also declined 46% from the year-ago quarter to $506 million, owing to weaker oil products sales margins.
Costs: During the period, Petrobras’ sales, general and administrative expenses were $616 million, lower than the year-ago period’s 660 million. Selling expenses also fell 13.8% from a year ago to $1,097 million.
Financial Position: During the three months ended Mar 31, 2019, Petrobras’ capital investment and expenditure totaled around $2,337 million, 24% lower than $3,067 million incurred in the year-ago period.
While Petrobras generated positive free cash flow for the 16th consecutive quarter, the metric declined to $3,212 million from $4,005 million recorded in the year-ago period. Adjusted EBITDA also declined 8% y/y to $7,294 million.
At the end of the quarter, the company had net debt of $95,525 million, increasing from $81,447 million a year ago. Net debt-to-capitalization ratio increased to 56% from 49% a year ago. Petrobras ended the first quarter with cash and cash equivalents of $9,361 million.
Zacks Rank and Key Picks
Petrobras currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Meanwhile, investors interested in the energy space can consider some better-ranked players such as:
Devon Energy Corporation (DVN - Free Report) : Devon’s 2019 earnings are expected to grow 68.2% on a year-over-year basis.
Repsol SA (REPYY - Free Report) : Repsol delivered average positive earnings surprise of 8.98% in the trailing four quarters.
Bonanza Creek Energy, Inc. : The company delivered average positive earnings surprise of 3.99% in the trailing four quarters. Bonanza Creek’s 2019 revenues are expected to grow 23.1% y/y.
Will you retire a millionaire?
One out of every six people retires a multimillionaire. Get smart tips you can do today to become one of them in a new Special Report, “7 Things You Can Do Now to Retire a Multimillionaire.”
Click to get it free >>
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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