Petrobras Q4 Earnings Beat as Output Growth Offsets Oil Drop

Petroleo Brasileiro S.A., or Petrobras PBR, posted fourth-quarter earnings per ADS of 72 cents, beating the Zacks Consensus Estimate of 57 cents. The bottom line improved from the year-ago profit of 49 cents. The strong numbers can be attributed to upstream production growth and higher downstream earnings. 

Consolidated net income, which strips out one-time items, came in at $4,750 million compared with $3,083 million a year earlier. Petrobras’ adjusted EBITDA moved up to $11,107 million from $7,165 million a year ago.

Brazil's state-run energy giant reported revenues of $23,608 million, which climbed 13.4% from the year-earlier sales of $20,815 million and beat the Zacks Consensus Estimate of $23,062 million. 

Along with the fourth-quarter earnings announcement, PBR added that it plans to shell out RMB 8.1 billion in dividends and equity interests.

Petroleo Brasileiro S.A.- Petrobras Price, Consensus and EPS Surprise

Petroleo Brasileiro S.A.- Petrobras price-consensus-eps-surprise-chart | Petroleo Brasileiro S.A.- Petrobras Quote

Coming back to earnings, let's take a deeper look at the recent performances of PBR’s two main segments: Upstream (Exploration & Production) and Downstream (or Refining, Transportation and Marketing).

Segment Details

Upstream: The Rio de Janeiro-headquartered company’s average oil and gas production during the fourth quarter reached 3,109 thousand barrels of oil equivalent per day (MBOE/d) — 81% liquids — compared with 2,628 MBOE/d in the same period of 2024.

Brazilian oil and natural gas production — constituting approximately 99% of the total output — improved 18.6% to 3,081 MBOE/d.

In the October to December period, the average sales price of oil (or the average Brent crude price) fell nearly 15% year over year to $63.69 per barrel. The decrease in crude prices was more than offset by the rise in production, thereby having a positive effect on upstream unit sales. Overall, the segment’s revenues improved to $14,329 million in the fourth quarter from $13,388 million in the year-ago period. 

As far as the bottom line is concerned, it was somewhat dented by an uptick in pre-salt lifting costs (which rose 3.2% from the year-ago period to $6.86 per barrel). Still, the upstream unit recorded a net income of $3,099 million, up 48% from fourth-quarter 2024 earnings of $2,094 million.

Downstream (or Refining, Transportation and Marketing): Revenues from the segment totaled $22,298 million, 15.6% higher than the year-ago figure of $19,291 million, due to higher domestic sales volumes. Petrobras' downstream unit recorded a profit of $576 million, which rose sharply from earnings of $15 million in the fourth quarter of 2024. Apart from an increase in revenues, the unit’s income was buoyed by higher product prices.

Costs

During the period, Petrobras’ sales, general and administrative expenses were $1,991 million, 31% higher than the year-ago quarter. Selling expenses rose from $1,080 million a year ago to $1,462 million. However, a significant reduction in other expenses led to a 25.9% decrease in total operating expenses.

A 17.9% uptick in cost of sales led to a drop in PBR’s operating income to $5,512 million in the fourth quarter of 2025 compared with $2,787 million a year ago.

Financial Position

During the three months ended Dec. 31, 2025, Petrobras’ capital investments and expenditures totaled $6,313 million compared with $5,731 million (including signature bonus) in the prior-year quarter.

The Zacks Rank #3 (Hold) company generated a positive free cash flow for the 43rd consecutive quarter, with the metric coming in at 3,580 million. However, it fell from $3,766 million recorded in last year’s corresponding period.

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At the end of 2025, Petrobras had a net debt of $60,593 million, up from $52,240 million a year ago and $59,053 million as of Sept. 30, 2025. The company ended the quarter with cash and cash equivalents of $6,471 million.

Petrobras’ net debt to trailing 12-month EBITDA ratio deteriorated to 1.42 from 1.29 in the previous year. It was 1.53 at the end of the previous quarter.

Some Key Energy Earnings

While we have discussed PBR’s fourth-quarter results in detail, let’s see how some other energy companies have fared this earnings season.

Europe’s largest oil company, Shell plc SHEL, reported fourth-quarter 2025 earnings per ADS (on a current cost of supplies basis, excluding items — the market’s preferred measure) of $1.14, which lagged the Zacks Consensus Estimate of $1.21 due to a decline in oil prices and unfavourable tax adjustments, partly offset by higher hydrocarbon production. The bottom line also fell from the year-ago adjusted profit of $1.20.

Shell’s revenues of $66.7 billion were down slightly from $66.8 billion in fourth-quarter 2024 and missed the consensus mark by 2%. Shell repurchased $3.4 billion in shares in the fourth quarter. The London-based company expects another $3.5 billion worth of repurchases for the first quarter.

Motor fuel retailer Murphy USA MUSA announced fourth-quarter 2025 adjusted earnings per share of $7.53 which beat the Zacks Consensus Estimate of $6.67 and compared favorably with the year-ago profit of $6.96. The outperformance was primarily on the back of higher merchandise results. Murphy USA’s operating revenues of $4.7 billion rose 0.7% year over year but missed the consensus mark by $57 million due to lower-than-expected petroleum product sales.

As of Dec. 31, Murphy USA — which opened 29 new retail locations in the quarter and closed one outlet to take its store count to 1,800 — had cash and cash equivalents of $28.9 million and long-term debt (including lease obligations) of $2.2 billion, with a debt-to-capitalization of 77.6%. During the quarter, MUSA bought back shares worth $67.5 million.

U.S. energy operator APA Corporation APA reported fourth-quarter 2025 adjusted earnings of 91 cents per share, beating the Zacks Consensus Estimate of 62 cents. The bottom line rose from the year-ago adjusted profit of 79 cents. APA’s outperformance primarily reflects higher-than-expected production and lower costs, partly offset by a drop in commodity realizations. Revenues of $2 billion were down 20.9% from the year-ago quarter’s sales but beat the Zacks Consensus Estimate by 3%.

During the quarter under review, APA generated $808 million of cash from operating activities while it incurred $434 million in upstream capital expenditures. The company reported an adjusted operating cash flow of $1 billion. It also registered a free cash flow of $425 million compared with $420 million a year ago. As of Dec. 31, APA had approximately $516 million in cash and cash equivalents and $4.3 billion in long-term debt, representing a debt-to-capitalization of 41.3%.

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