Petrobras Q1 Earnings Slump on Flat Production, Price Drop

Petroleo Brasileiro S.A., or Petrobras PBR, announced first-quarter earnings per ADS of 62 cents, missing the Zacks Consensus Estimate of 92 cents and falling from the year-ago profit of 75 cents. The underperformance can be attributed to lower downstream production and a decline in realized oil prices. 

Consolidated net income, which strips out one-time items, came in at $4,029 million compared with $5,420 million a year earlier. Petrobras’ adjusted EBITDA fell to $10,446 million from $12,127 million a year ago.

Brazil's state-run energy giant reported revenues of $21,073 million, which fell 11.3% from the year-earlier sales of $23,768 million and missed the Zacks Consensus Estimate of $21,639 million. 

Along with the first-quarter earnings announcement, PBR added that it plans to shell out RMB 2.1 billion in dividends and equity interests.

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).

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

Upstream

The Rio de Janeiro-headquartered company’s average oil and gas production during the first quarter reached 2,771 thousand barrels of oil equivalent per day (MBOE/d) — 80% liquids — compared to 2,776 MBOE/d in the same period of 2024.

Brazilian oil and natural gas production — constituting approximately 99% of the total output — remained essentially flat at 2,740 MBOE/d.

In the January to March period, the average sales price of oil (or the average Brent crude price) fell 9.1% year over year to $75.66 per barrel. The decrease in crude prices, together with stagnant production, had a negative effect on upstream unit sales. Overall, the segment’s revenues declined to $15,067 million in the quarter under review from $16,077 million in the year-ago period. 

As far as the bottom line is concerned, it was further dented by an uptick in pre-salt lifting costs (which rose 12.7% from the year-ago period to $7.08 per barrel). Consequently, the upstream unit recorded a net income of $4,987 million, down 14.7% from first-quarter 2024 earnings of $5,846 million.

Downstream (or Refining, Transportation and Marketing)

Revenues from the segment totaled $19,989 million, 9.9% lower than the year-ago figure of $22,190 million, due to lower production volumes. Petrobras' downstream unit recorded a profit of $367 million, which fell sharply from earnings of $775 million in the first quarter of 2024. Apart from a decline in production volume, the unit’s income was affected by lower utilization.

Costs

During the period, Petrobras’ sales, general and administrative expenses were $1,534 million, 13.8% lower than the year-ago quarter. Selling expenses also fell from $1,333 million a year ago to $1,090 million. Moreover, a reduction in “other expenses” and material-related costs led to a 4.9% decrease in total operating expenses.

The decline in costs was more than offset by lower revenues, leading to a drop in PBR’s operating income to $7,276 million in the first quarter of 2025 compared with $8,984 million a year ago.

Financial Position

During the three months ended March 31, 2025, Petrobras’ capital investments and expenditures totaled $4,065 million compared with $3,043 million (excluding signature bonus) in the prior-year quarter.

Importantly, the Zacks Rank #4 (Sell) company generated a positive free cash flow for the 40th consecutive quarter, with the metric coming in at $4,536 million. However, it fell from $6,547 million recorded in last year’s corresponding period.

You can see the complete list of today’s Zacks #1 Rank stocks here.

At the end of the first quarter, Petrobras had a net debt of $56,034 million, up from $43,646 million a year ago and $52,240 million as of Dec. 31 2024. The company ended the quarter with cash and cash equivalents of $4,695 million.

Petrobras’ net debt to trailing 12-month EBITDA ratio deteriorated to 1.45 from 0.86 in the previous year. It was 1.29 at the end of the previous quarter.

Some Key Energy Earnings

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

Oil supermajor Chevron CVX reported earnings per share of $2.18, beating the Zacks Consensus Estimate of $2.15. The outperformance stemmed from higher-than-expected U.S. natural gas production in Chevron’s key upstream segment. The unit’s domestic output of 2,859 million cubic feet per day (MMcf/d) came in above the consensus mark of 2,666 MMcf/d. A healthy gain in the commodity’s U.S. realizations also played its part.  

The company recorded $5.2 billion in cash flow from operations compared to $6.8 billion in the year-ago period due to a drop in earnings and tax payments associated with divestment in Canada. Chevron’s free cash flow for the quarter was $1.3 billion.

ConocoPhillips COP, one of the world’s largest independent oil and gas producers, reported adjusted earnings per share of $2.09, which beat the Zacks Consensus Estimate of $2.06. The outperformance can be attributed to higher oil equivalent production volumes, partly offset by decreased realized oil prices.

As of March 31, ConocoPhillips had $6.3 billion in cash and cash equivalents. The company had a total long-term debt of $23.2 billion and a short-term debt of $608 million as of the same date. ConocoPhillips’ capital expenditure and investments totaled $3.4 billion. Net cash provided by operating activities was $6.1 billion.

Finally, we have refiner Marathon Petroleum’s MPC first-quarter adjusted loss per share of 24 cents, narrower than the Zacks Consensus Estimate of a loss of 63 cents. This primarily reflects the stronger-than-expected performance of its Refining & Marketing segment. Marathon Petroleum’s adjusted EBITDA of the segment totaled $489 million, surpassing the consensus mark of $286 million on the back of lower costs and higher throughput.

Marathon Petroleum reported expenses of $31.2 billion in first-quarter 2025, down from $31.4 billion reported in the year-ago quarter. MPC repurchased $1.1 billion of shares during the period. It currently has a remaining authorization of $6.7 billion.

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