Petrobras (PBR Quick QuotePBR - Free Report) is set to release third-quarter results on Nov. 7, 2024. The Zacks Consensus Estimate for earnings is pegged at 87 cents per share and that for revenues is pinned at $23.12 billion.

Let us delve into the factors that are likely to have influenced this integrated oil and gas company’s performance in the to-be-reported quarter. But first, it is worth taking a look at PBR’s performance in the last reported quarter.

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Highlights of PBR’s Q2 Earnings

In the last quarter, PBR, one of the largest oil and gas producers in Brazil, reported earnings of 47 cents per ADS, in line with the Zacks Consensus Estimate, driven by year-over-year production gains. However, revenues of $23.47 billion missed the Zacks Consensus Estimate of $24.22 billion.

PBR beat the Zacks Consensus Estimate for earnings twice in the trailing four quarters while missing the same in the other two, delivering average negative surprise of 0.44%.

This is depicted in the graph below:

PBR’s Trend in Estimate Revision

The Zacks Consensus Estimate for third-quarter 2024 earnings has witnessed two downward movements in the past 30 days. The estimated figure indicates a 9.53% year-over-year decrease. The Zacks Consensus Estimate for revenues indicates a 1.16% increase from the year-ago period.
 

Factors to Consider for PBR’s Q3 Performance

PBR's revenues are likely to have improved in the quarter to be reported. This multinational energy company earns money through a multi-faceted approach. It explores and produces oil and natural gas, refines crude oil into valuable products like gasoline and diesel, transports these products to markets and sells them to consumers and industries. Additionally, Petrobras generates revenues from natural gas, biofuels, petrochemicals and electricity generation. However, its profitability has been influenced by global oil prices, production costs, exchange rates and government regulations.

According to Petrobras' “Production and Sales Report” for the third quarter of 2024, the company produced 2.7 million barrels of oil equivalent per day. A highlight of the quarter was the peak production achieved at the FPSO Sepetiba in the Mero field, thanks to the start-up of three new wells and progress in the Búzios and Tupi fields. This increase in output is expected to have positively impacted the company’s revenues and cash flows.

Another positive development was the record high of 73% of pre-salt oil processed at Petrobras’ refineries, up 4% from the previous quarter. Pre-salt oil production enables Petrobras to produce higher-value products while also contributing to a reduction in greenhouse gas emissions. In August, pre-salt oils made up 76% of the processed volume, setting a new monthly record. On the sales side, the company saw a 4.2% increase in the production and sales of oil products in the domestic market compared with the previous quarter, driven by seasonal demand.

September was particularly strong, with refinery utilization hitting 97%, the highest rate for the year. This reflects the company’s operational efficiency, successful logistics and marketing strategies. Overall, PBR produced 1,818 thousand barrels of oil products per day, focusing on high-demand items such as diesel, gasoline and aviation fuel, which accounted for 68% of total output, despite maintenance shutdowns at several refineries.

But on a somewhat bearish note, the increase in Petrobras’ costs might have dented its to-be-reported bottom line. PBR’s pre-salt lifting costs in the second quarter increased around 9.6% year over year to $6.26 per barrel. This upward cost trajectory is likely to have continued in the third quarter due to the prevailing inflationary environment.
 

What Does Our Model Predict for PBR?

The proven Zacks model does not conclusively predict an earnings beat for Petrobras this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that is not the case here.

PBR’s Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -4.23%.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank of PBR:  PBR currently carries a Zacks Rank #3.
 

Stocks to Consider

Here are some firms from the energy space that you may want to consider, as these have the right combination of elements to post an earnings beat this season.

Sunoco (SUN Quick QuoteSUN - Free Report) has an Earnings ESP of +13.44% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The firm is scheduled to release earnings on Nov. 6. SUN’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the remaining one, delivering an average surprise of 8.09%.

Helmerich & Payne (HP Quick QuoteHP - Free Report) has an Earnings ESP of +2.90% and a Zacks Rank #3 at present. The firm is scheduled to release earnings on Nov. 13.

HP’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the remaining one, delivering an average surprise of 14.79%. It is engaged in the contract drilling of oil and gas wells in the United States and internationally.