Petrobras Hits 52 Week Lows on Dividend Cut, Spike in Debt

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U.S.-listed shares of Petroleo Brasileiro ( PBR ), also known as Petrobras, are down more than 6% and have hit new 52-week lows of 16.56 after it cut its dividend to save cash in order to pay for its investment plans.

Shares are also seeing pressure after the state-owned oil and gas company said its debt level rose to 2.77 times earnings before interest, taxes, depreciation and amortization - exceeding the company's limit of 2.5 times EBITDA.

PBR reported a 36% year-over-year decline in FY12 profit to 21.2 billion Brazilian reais, or about $10.65 billion

Nonetheless, PBR's Q4 profit topped expectations, climbing 53.5% from the final three months of 2011 to 7.75 billion Brazilian reais ($3.89 billion) and beating the analyst consensus projecting about 6 billion reais ($3.02 billion) in net income. But analysts cautioned nearly all of the Q4 rise could be attributed to a $1.33 billion gain on the sale of Brazilian treasury bonds and a two-thirds drop in the company's income and social security taxes.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Commodities

Referenced Stocks: PBR

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