Petroleo Brasileiro S.A., or Petrobras (PBR Quick QuotePBR - Free Report) , reported first-quarter 2026 earnings per ADS of 70 cents, missing the Zacks Consensus Estimate of $1.02. The bottom line came up short as the company posted weaker-than-expected sales for the quarter. Petrobras posted revenues of $23,535 million, which missed the Zacks Consensus Estimate of $26,432 million (an 11% revenue miss).

However, Brazil's state-run energy giant’s EPS improved from the year-ago profit of 62 cents, while revenues increased 11.7% year over year. This was mainly because international sales jumped, more than offsetting a nearly flat domestic market.

Consolidated net income excluding one-off events (attributable to Petrobras shareholders) totaled $4,535 million in the first quarter of 2026 compared with $4,029 million in the year-ago quarter. Adjusted EBITDA excluding one-off events came in at $11,737 million, up from $10,652 million a year ago.

Management also highlighted continued cash generation, with operating cash flow of $8,399 million and free cash flow of $3,855 million in the first quarter. Petrobras said it paid R$ 72.4 billion in taxes across federal, state and municipal governments during the quarter and approved R$ 9 billion in shareholder remuneration related to the March-quarter results.

Petroleo Brasileiro S.A.- Petrobras Price, Consensus and EPS Surprise

Petroleo Brasileiro S.A.- Petrobras price-consensus-eps-surprise-chart | Petroleo Brasileiro S.A.- Petrobras Quote

Below is a closer look at Petrobras’ key business segments: Exploration & Production (E&P) and Refining, Transportation and Marketing (RTM), along with Gas and Low Carbon Energies (G&LCE).

Upstream (Exploration & Production)

In the first quarter of 2026, Petrobras’ average oil, NGL and natural gas production reached a record 3,225 thousand barrels of oil equivalent per day (MBOE/d). This represented a 3.7% increase from 3,109 MBOE/d in the previous quarter and a 16.1% rise from 2,778 MBOE/d in the year-ago period. The output gains were driven largely by the ramp-up of key FPSOs — including P-78 (Búzios), Alexandre de Gusmão (Mero), and Anna Nery and Anita Garibaldi (Marlim and Voador) — alongside improved operational efficiency and reduced losses from maintenance shutdowns. During the quarter, Petrobras also brought 10 new producing wells online (seven in the Campos Basin and three in the Santos Basin).

On the pricing front, the average Brent crude price climbed to $80.61 per barrel, up 6.5% year over year (and sharply higher sequentially). Against that backdrop, E&P segment revenues increased to $15,996 million in the quarter under discussion from $15,067 million a year earlier.

As far as profitability is concerned, the upstream unit recorded net income attributable to Petrobras shareholders of $4,845 million, slightly below the year-ago figure of $4,987 million. The segment’s adjusted EBITDA improved to $10,308 million from $9,965 million in the first quarter of 2025.

Brazil lifting cost was $6.76 per barrel of oil-equivalent in the first quarter of 2026, versus $6.79 a year ago (essentially flat year over year). Production taxes (Brazil) increased to $3,455 million from $2,800 million.

Downstream (Refining, Transportation and Marketing)

RTM segment revenues were $22,297 million in the period under consideration, up from $19,989 million in the first quarter of 2025. Profitability improved sharply, with net income attributable to Petrobras shareholders jumping to $2,300 million from $367 million a year ago and adjusted EBITDA rising to $3,848 million from $1,069 million.

The performance improvement was supported by stronger operating execution. Petrobras increased total production volume to 1,816 thousand barrels per day (Mbpd), up 6.5% from the first quarter of 2025, as refining utilization climbed to 95% from 90% in the prior-year quarter. Management noted that middle distillates (diesel and jet fuel) and gasoline accounted for 68% of total oil products output in the first quarter, and highlighted record S-10 diesel production in March (512 Mbpd). Higher production also helped lift sales of domestically produced products and reduce imports, supporting margins and overall segment results.

While domestic product sales were seasonally lower versus the fourth quarter of 2025 (a quarter that typically captures stronger end-of-year demand), Petrobras indicated that the operational gains and improved product slate helped drive the quarter’s stronger downstream financial outcome.

Petrobras reported Brazil refining cost of $3.28 per barrel compared with $2.62 in the corresponding period of 2025.

Gas and Low Carbon Energies

G&LCE delivered revenues of $2,205 million in the first quarter of 2026 versus $1,860 million in the year-ago period. Segment net income attributable to Petrobras shareholders was $120 million (compared with a loss of $28 million a year ago), and adjusted EBITDA increased to $334 million from $87 million.

The performance boost was underpinned by both gas and power dynamics. Petrobras reported that natural gas sales volume was up 15% from the first quarter of 2025, mainly due to higher gas supply to fertilizer plants following the start-up of units in Bahia and Sergipe. On the supply side, national gas deliveries increased as Petrobras experienced fewer scheduled and unscheduled maintenance stoppages, which contributed to lower imports from Bolivia and LNG. In power, electricity sales rose to 1,207 average MW from 606 in the first quarter of 2025, primarily to optimize the natural gas supply portfolio and meet steam demand from third parties.

Costs

On a consolidated basis, Petrobras reported operating expenses of $3,492 million in the quarter versus $3,112 million in the year-ago period (up 12.2% year over year). Sequentially, operating expenses were down significantly from $5,330 million in the fourth quarter of 2025.

Financial Position

For the first quarter of 2026, Petrobras reported total capital spending of $5,107 million. The Zacks Rank #1 (Strong Buy) company ended the quarter with cash and cash equivalents of $6,570 million.

You can see the complete list of today’s Zacks #1 Rank stocks here.

At quarter-end, net debt totaled $62,093 million, up from $56,034 million a year ago. Petrobras’ net debt to trailing 12-month EBITDA ratio was 1.43 compared with 1.45 a year ago. It was 1.42 at the end of the previous quarter.

Some Key Energy Earnings

While we have discussed PBR’s first-quarter results in detail, let’s see how some other energy companies have fared this earnings season.

Europe’s largest oil company, Shell plc (SHEL Quick QuoteSHEL - Free Report) , delivered a strong bottom line in the first quarter of 2026, helped by solid operational execution and higher contributions from trading and optimization. Earnings came in at $2.44 per ADS (on a current cost of supplies basis, excluding items), translating from adjusted earnings per share of $1.22, up 32.6% from the year-ago quarter’s 92 cents. Shell’s bottom line beat the Zacks Consensus Estimate of $1.78 by 37.1%.

However, total revenue and other income of $70.1 billion were essentially flat year over year and missed the consensus mark of $83.3 billion by 15.8%. Shell’s oil and gas production available for sale averaged 2,752 MBOE/d during the quarter.

Motor fuel retailer Murphy USA (MUSA Quick QuoteMUSA - Free Report) posted earnings of $7.28 per diluted share, up 176.8% from $2.63 a year ago and ahead of the Zacks Consensus Estimate of $5.37 by 35.6%. Total operating revenues rose 6.5% year over year to $4.8 billion and topped the consensus mark of $4.7 billion by 3.9%. Murphy USA’s results reflected a more favorable refined-products environment and solid execution, with total fuel contribution of 35 cents per gallon and total retail fuel volumes up 2.1% year over year.

Murphy USA ended the quarter with $118.6 million of cash and cash equivalents and $2.1 billion of long-term debt, with a debt-to-capitalization of 76.4%. Operating cash flow increased to $320 million from $128.5 million a year ago, aided by working capital dynamics.

Meanwhile, upstream operator Diamondback Energy (FANG Quick QuoteFANG - Free Report) reported first-quarter 2026 adjusted earnings per share of $4.23, which beat the Zacks Consensus Estimate of $3.55, driven by strong production. However, the company’s bottom line declined from the year-ago adjusted profit of $4.54. The underperformance was due to a 91.5% drop in the year-over-year realized natural gas prices. Diamondback’s production of oil and natural gas averaged 979.4 MBOE/d, comprising 53.2% oil. 

Diamondback Energy logged $933 million in capital expenditure — spending $784 million on operated drilling and completion additions to oil and natural gas properties, and $149 million on non-operated additions. The company booked $1.7 billion in adjusted free cash flow in the first quarter.