Petrobras (PBR): Will It Disappoint This Earnings Season?
Zacks Investment Research | May 09, 2016 09:46PM ET
Brazilian state-run energy giant Petroleo Brasileiro S.A. or Petrobras (NYSE:PBR) is expected to release first-quarter 2016 results on Thursday, May 12.
Petrobras’ earnings were a mixed bag in the trailing four quarters – two beats and two misses – with the average being a negative surprise of 153.32%. The company missed estimates in the last reported quarter owing to significant fall in realized oil and gas prices that hurt the company’s upstream operation.
Let’s see how things are shaping up for this announcement.
Factors Likely to Influence this Quarter
Petrobras generates most of its earnings from upstream operations. As such, its first-quarter financials are likely to remain challenged in the face of the persistent weakness in commodity prices.
However, being an integrated company, Petrobras is expected to take advantage of the current environment with its downstream operations. Last quarter, this unit attained profitability against a massive loss incurred in fourth-quarter 2014.
Petrobras’ reduced capital spending and divestment plans should lend further support to its financials. Also, the estimates for this quarter have been revised upward over the last 30 days, giving an indication of further bullishness ahead. So it will be interesting to see whether the Petrobras beats estimates.
Earnings Whispers
Our proven model does not conclusively show that Petrobras is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Zacks Investment Research
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