Are Petrobras' (PBR) Q4 Earnings Poised to Exceed Estimates?
Petroleo Brasileiro S.A., or Petrobras PBR is set to release fourth-quarter results on Feb 23. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 84 cents per share on revenues of $24 billion.
Let’s delve into the factors that might have influenced Brazil's state-run energy giant’s performance in the December quarter. But it’s worth taking a look at Petrobras’ previous-quarter release first.
Highlights of Q3 Earnings & Surprise History
In the last-reported quarter, the integrated energy major missed the consensus mark due to unfavorable currency effects and higher pre-salt lifting costs. Petrobras had reported earnings per ADS of 52 cents, below the Zacks Consensus Estimate of 72 cents. However, revenues of $23.3 billion generated by the firm had come in above the Zacks Consensus Estimate of $22.4 billion riding on higher oil prices.
PBR topped the Zacks Consensus Estimate in the trailing four quarters, with the average beat being 294.7%. This is depicted in the graph below:
Petroleo Brasileiro S.A. Petrobras Price and EPS Surprise
Petroleo Brasileiro S.A. Petrobras price-eps-surprise | Petroleo Brasileiro S.A. Petrobras Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the fourth-quarter bottom line was revised 13.5% upward in the past seven days. The estimated figure indicates a 2.4% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 72.5% increase from the year-ago period.
Factors to Consider
The commodity price boost is likely to have buoyed the results of the upstream unit of Petrobras. In the July-to-September period, the average sales price of oil in Brazil soared 64.4% from the year-earlier period to $69.54 per barrel. The uptick is most likely to have continued in the fourth quarter, thanks to the sharp rebound in commodity prices that revisited their multi-year highs following the vaccine progress and the ongoing macroeconomic recovery.
But on a somewhat bearish note, PBR is likely to have faced a sequential decline in production. Per Petrobras’ recently issued update, the company churned out an average of 2,704 thousand barrels of oil equivalent per day in the fourth quarter, down 4.5% from Q3. The fall could be blamed on planned stoppages and production-sharing pacts. This might have impacted the company’s revenues and cash flows in the December quarter.
What Does Our Model Say?
The proven Zacks model does not conclusively predict that Petrobras is likely to beat fourth-quarter estimates. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: PBR has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 84 cents per share each.
Zacks Rank: Petrobras currently carries a Zacks Rank #3.
Stocks to Consider
Here are some firms from the energy company that you may want to consider on the basis of our model:
Pembina Pipeline Corporation PBA has an Earnings ESP of +20.43% and a Zacks Rank #2. The firm is scheduled to release earnings on Feb 24.
You can see the complete list of today’s Zacks #1 Rank stocks here.
PBA is valued at around $18.5 billion. Pembina Pipeline topped the Zacks Consensus Estimate in the trailing four quarters, with the average beat being 4.2%. PBA has gained some 26.2% in a year.
Viper Energy Partners LP VNOM has an Earnings ESP of +14.93% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 22.
VNOM topped the Zacks Consensus Estimate in the trailing four quarters with the average beat being 103.1%, including a 133.3% beat in Q3. Viper Energy Partners has rallied around 76.3% in a year.
Diamondback Energy, Inc. FANG has an Earnings ESP of +0.91% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 22.
FANG beat earnings estimates in each of the last four quarters — the earnings surprise being 11.7%, on average. Diamondback has surged around 101.9% in a year.
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Petroleo Brasileiro S.A. Petrobras (PBR) : Free Stock Analysis Report
Pembina Pipeline Corp. (PBA) : Free Stock Analysis Report
Diamondback Energy, Inc. (FANG) : Free Stock Analysis Report
Viper Energy Partners LP (VNOM) : Free Stock Analysis Report
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