Petrobras Plummets 16%, Defers Q3 Earnings Date Again - Analyst Blog

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Brazil's state-run energy giant Petroleo Brasileiro S.A., or Petrobras ( PBR ) declared that it has deferred its third-quarter 2014 earnings yet again. Petrobras was slated to release its third-quarter earnings last Friday but is now expected to provide the unaudited report within Jan 31, 2015, without violating debt covenants.

The delay is owing to Petrobras' decision to incorporate the results of the investigation of new developments − post-Nov 13, 2014 − on existing money laundering and bribery cases. Following the announcement, Petrobras ADR plummeted almost 16% to touch a new 52-week low of $6.01 per ADR.

However, the company provided some limited financial information, which will not likely be impacted by the outcome of the ongoing investigations.


Petrobras reported third quarter 2014 revenues of $38,860 million, higher than $33,908 million in the year-ago period. Improved demand for diesel in the domestic market along with increased level of export of crude oil led to the improvement.

Upstream Operation

Production and Realized Commodity Prices: Petrobras produces roughly 2,746 thousand barrels per day (MBbl/D) of oil and natural gas - both in the domestic and international market − higher than 2,522 MBbl/D in third quarter 2013.

In the domestic market, Petrobras' sale price of crude oil was $90.73 per barrel against $98.87 per barrel in the year-ago quarter. Moreover, the realized sale price crude oil in the international market was $84.05 per barrel, lower than $85.97 per barrel in the Jul-Sep quarter of 2013.

Regarding natural gas, the average international sales price increased 4% from the third quarter of 2013, while domestic was up 6%.

Refining Business

Total output of refined oil products of Petrobras during third quarter 2014 was up 4% to 2,204 MBbl/D.

Balance Sheet

At the end of the quarter, the company had cash and cash equivalents of 62,409 million Brazilian reais and net debt of 261,445 million Brazilian reais.

Other News

As per Bloomberg, Petrobras has decided to cut its exploration and refining investment in the near term for plunging crude oil prices .

Zacks Rank

Petrobras currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at better-ranked players in the energy sector like SandRidge Mississippian Trust I ( SDT ), Sandridge Mississippian Trust II ( SDR ) and Seadrill Partners LLC ( SDLP ). All the stocks sport a Zacks Rank #1 (Strong Buy).

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

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

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