The Zacks Analyst Blog Highlights: Petroleo Brasileiro, Exxon Mobil, Royal Dutch Shell, Chevron and Avnet


For Immediate Release

Chicago, IL – August 14, 2012 – announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Petroleo Brasileiro S.A. (PBR), Exxon Mobil Corp. (XOM), Royal Dutch Shell plc (RDS.A), Chevron Corporation (CVX) and Avnet, Inc. (AVT).


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Here are highlights from Monday’s Analyst Blog:

Petrobras in Rig Deal with 3 Firms


State-controlled energy company Petroleo Brasileiro S.A. or Petrobras (PBR) inked a vessel chartering and operating deal with the trio Sete Brasil, Odebrecht S.A. and Etesco.

Per the deal, nine drilling vessels will be manufactured in Brazil and chartered to Petrobras thereafter for 15 years. These rigs form the last leg of the set of 21 rigs that was awarded to Petrobras by Sete Brasil in an agreement signed in early February.

Out of the nine contacted rigs, six will be constructed at the Enseada Paraguaçu shipyard in Maragogipe. Four of these vessels will be operated by Odebrecht and the other two by Etesco. The remaining three drilling vessels will be set-up at the Rio Grande 2 shipyard and Etesco will operate them.

These drilling vessels will be constructed using local content of about 55%–65%. The rigs – slated to be delivered in 2016 – have a drilling capacity of up to 32,808.4 feet, and are able to operate in water depth of 9,842.5 feet. The rigs will be used for exploration activities in the pre-salt layer of Santos Basin.

Headquartered in Rio de Janeiro, Petrobras is the largest integrated energy firm in Brazil, dominating the country’s energy sector. The company produces a lion’s share of South American country’s crude oil and natural gas, and accounts for almost all of the country’s refining capacity.

In early August, Petrobras reported second-quarter 2012 loss of R$1.3 billion or R$0.11 per share, compared with earnings of R$10.9 billion or R$0.84 in the year-earlier quarter. Loss per ADR came in at 10 cents (1 ADR = 2 shares), far worse than the Zacks Consensus Estimate of 33 cents in profit.

The company’s net operating revenues of $34.7 billion were down 9.4% from the second-quarter 2011 level. Quarterly results were dragged down by a weak domestic currency, rising costs and heavy fuel imports.

Petrobras – which is the fourth biggest company by market capitalization after Exxon Mobil Corp. (XOM), Royal Dutch Shell plc (RDS.A) and Chevron Corporation (CVX) – currently retains a Zacks #3 Rank (short-term Hold rating).




Top Management Change at Avnet


Avnet, Inc. (AVT) recently came out with its succession plan for the Chairman of the Board after current Chairman Roy Vallee announced his decision to retire and not to run for re-election. 


Vallee served as the Chairman of Avnet for 14 years and another 13 years as the Chief Executive Officer.


In response, Avnet plans to select current board member William Schumann III to serve as the non-executive chairman, subject to his re-election as an Avnet board member by shareholders at its annual meeting in November.


Prior to joining Avnet’s Board in February 2010, Schumann served as the Executive Vice President of FMC Technologies, Inc. Schumann served in a variety of financial and operational leadership positions in FMC Corporation since joining in 1981.  He was the Senior Vice President and Chief Financial Officer prior to the creation of FMC Technologies in 2001. Schumann served as the Chief Financial Officer at FMC Technologies from 2001 until he retired from his position in November 2011.


It remains to be seen how a change in management helps Avnet to march forward in an uncertain macroeconomic environment. 


Earlier, Avnet reported sales of $6.31 billion in the fourth quarter of fiscal 2012, down 8.8% year over year. Although revenues in the quarter were within management’s guidance range of $6.30 billion to $6.90 billion, it failed to meet Zacks Consensus Estimate of $6.54 billion. 


Avnet ported an adjusted net income of $145.3 million or 99 cents per share in the fourth quarter of fiscal 2012, down from a net income of $189.4 million or $1.22 per share in the year-ago quarter and an adjusted net income of $151.6 million or $1.03 per share in the previous quarter. 


Reported earnings lagged the Zacks Consensus Estimate of $1.08 per share as well as management’s guidance range of $1.05 - $1.13 per share. Earnings estimates have moved downward after the company reported its fourth quarter results. 





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Read the analyst report on PBR

Read the analyst report on XOM

Read the analyst report on RDS.A

Read the analyst report on CVX

Read the analyst report on AVT

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