Petrobras Q3 profit falls 39 pct, misses market outlook

Reuters

By Jeb Blount and Sabrina Lorenzi

RIO DE JANEIRO, Oct 25 (Reuters) - Brazil's state-run oilcompany, Petrobras, said on Friday that third-quarter profitfell 39 percent as rising exploration and administrative costsdrove up spending while fuel subsidies choked revenue growth.

The Rio de Janeiro-based company, formally known as PetroleoBrasileiro SA, said net income in the three monthsending Sept. 30 was 3.40 billion reais, missing the average 5.84billion real ($2.68 billion) estimate of 10 analysts surveyed byReuters.

Net sales in the third quarter rose 5.3 percent to 77.7billion reais, below the average analyst estimate of 78.7billion reais. Net fuel and crude imports soared 57 percentduring the quarter to 425,000 barrels a day.

Brazil's government has not allowed Petrobras to raisedomestic fuel prices in line with international prices. Thus, imported fuel is sold at a loss.

Earnings before interest, taxes, depreciation andamortization (EBITDA) fell 8.9 percent to 13.09 billion reais inthe quarter, short of the 15.6 billion real average estimate.EBITDA is a measure of a company's ability to generate cash andprofit from operations.

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