Will Petrobras Pull Off Q4 Earnings Beat on Strong Production?

Petroleo Brasileiro S.A., or Petrobras PBR, is set to release fourth-quarter 2025 results on March 5. The Zacks Consensus Estimate for the to-be-reported quarter is a profit of 57 cents per share on revenues of $23.1 billion.

Let’s delve into the factors that might have influenced Brazil's state-run energy giant’s earnings in the December quarter. But it’s worth taking a look at PBR’s previous-quarter performance first.

Highlights of Q3 Earnings & Surprise History

In the last reported quarter, the Rio de Janeiro-headquartered oil company beat the consensus mark on the back of strong production growth. Petrobras had reported earnings per ADS of 82 cents, topping the Zacks Consensus Estimate of 79 cents. Revenues of $$23.5 billion, however, missed the Zacks Consensus Estimate by 1% due to a decline in realized oil prices.

Petrobras beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two, resulting in an earnings surprise of a negative 1.2%, on average. 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 has remained unchanged in the past seven days. The estimated figure indicates a 16.3% increase year over year. The Zacks Consensus Estimate for revenues suggests a 10.8% improvement from the year-ago period.

Factors to Consider

A key driver of Petrobras’ fourth-quarter performance is likely to have been the continued ramp-up of high-productivity offshore assets, particularly in the pre-salt region. Average production reached 3,109 thousand barrels of oil equivalent per day (MBOE/d) in the fourth quarter, supported by increased capacity from FPSOs such as Almirante Tamandaré and Marechal Duque de Caxias, along with the ramp-up of Alexandre de Gusmão and new offshore wells in the Santos Basin. These projects enhanced operational efficiency and helped offset production declines in mature fields. Pre-salt output alone accounted for about 82% of total production, underscoring the strategic importance of these assets in sustaining volume growth and revenue generation during the quarter.

Despite strong upstream performance, Petrobras faced operational headwinds in refining during the fourth quarter. The refining system utilization factor fell to 89% in the quarter from 94% in the previous quarter, primarily due to scheduled maintenance shutdowns and expansion work at the REVAP refinery. As a result, the production of key refined products declined quarter over quarter, including diesel (-7.6%), gasoline (-1.0%), and jet fuel (-12.4%). Lower throughput reduced total oil product output to 1.702 million barrels per day, which is likely to have constrained downstream revenue and margins during the quarter despite steady demand in certain fuel segments.

What Does Our Model Say?

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 beating estimates. 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 both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 57 cents per share.

Zacks Rank: Petrobras currently carries a Zacks Rank #3.

Stocks to Consider

While an earnings beat looks uncertain for Petrobras, here are some firms that you may want to consider on the basis of our model:

Molecular Partners AG MOLN has an Earnings ESP of +5.26% and a Zacks Rank #2. The firm is scheduled to release earnings on March 12.

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

The Zacks Consensus Estimate for 2026 earnings of Molecular Partners indicates 18.9% growth. Valued at some $207 million, MOLN is down 2% in a year.

Dollar General DG has an Earnings ESP of +5.37% and a Zacks Rank #3. The firm is scheduled to release earnings on March 12.

Dollar General beat the Zacks Consensus Estimate for earnings in each of the last four quarters, with the average being 22.9%. Valued at around $34 billion, DG has gained 112.9% in a year.

Dollar Tree DLTR has an Earnings ESP of +2.50% and a Zacks Rank #3. The firm is scheduled to release earnings on March 16.

The Zacks Consensus Estimate for Dollar Tree's fiscal 2026 earnings indicates 12.2% growth. Valued at nearly $24 billion, DLTR is up 72.2% in a year.

Free Report: Profiting from the 2nd Wave of AI Explosion

The next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.

Investors who bought shares like Nvidia at the right time have had a shot at huge gains.

But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.

Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.

Access AI Boom 2.0 now, absolutely free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Petroleo Brasileiro S.A.- Petrobras (PBR): Free Stock Analysis Report

Dollar General Corporation (DG): Free Stock Analysis Report

Dollar Tree, Inc. (DLTR): Free Stock Analysis Report

Molecular Partners AG Sponsored ADR (MOLN): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research