The Zacks Analyst Blog Highlights: Petroleo Brasileiro S.A., ExxonMobil, PetroChina Co., Royal Dutch Shell and General Motors Co.
CHICAGO, May 17, 2011 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Petroleo Brasileiro S.A. (NYSE: PBR), ExxonMobil Corp. (NYSE: XOM), PetroChina Co. Ltd. (NYSE: PTR), Royal Dutch Shell plc (NYSE: RDS.A) and General Motors Co. (NYSE: GM).
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Here are highlights from Monday's Analyst Blog:
Petrobras: Another Strong Quarter
Brazilian state-run energy giant Petroleo Brasileiro S.A. (NYSE: PBR), or Petrobras S.A., announced its first quarter earnings of R$10,985.0 million or R$0.84 per share, compared with R$7,726.0 million or R$0.88 per share in the year-earlier quarter. Per share profitability dropped after the company sold $70 billion of new stock in September last year.
Earnings per ADR came in at $1.01 (exchange rate: U.S.$1.00 = R$1.66, 1 ADR = 2 shares), ahead of the Zacks Consensus Estimate of 93 cents. This was mainly on the back of improved crude prices amid strong domestic energy demand, aided by a strengthening currency, partially offset by government caps on fuel prices that eroded refining margins.
Petrobras' revenues of R$54,800.0 million (or approximately $33,012.0 million) were up 8.7% from the first quarter 2010 level and also beat our projection by 3.2%.
Segmental Performance
Upstream: Total oil and gas production during the first quarter of 2011 reached 2,627 thousand oil-equivalent barrels per day (MBOE/d), up from 2,547 MBOE/d in the same period of 2010.
Compared with the previous year period, Brazilian oil and natural gas liquids production increased 3.0%, while international production remained flat. Brazilian natural gas volumes were up 7.6% from the year-ago period. However, international output during the quarter fell 2.1% year over year.
During the first quarter of 2011, the average sales price of oil in Brazil increased 29.0% from the year-earlier period to $94.04 per barrel. Average sales price of international oil was up 40.9% year-over-year, reaching $87.39 per barrel. Regarding natural gas, average international sales price increased 10.5% from the first quarter of 2010 but domestic price was down 38.6%.
Downstream: Refining costs per barrel in Brazil were up 24.5% to $4.53. Internationally, it increased 44.9% to $4.81. Lifting cost per barrel moved up 28.5% in Brazil to $30.48, while overseas costs rose 10.6% to $5.65. Petrobras exported an average of 646,000 barrels of oil per day, 13.8% below what it did in the same period last year.
Capital Spending & Balance Sheet
During the three months ended March 31, 2011, Petrobras' capital investments totaled R$15,871.0 million. At the end of the quarter, the company had cash and cash equivalents of R$43,345.0 million and net debt of R$66,064.0 million. Net debt-to-capitalization ratio was approximately 17%.
About the Company
Headquartered in Rio de Janeiro, Petrobras competes with other established integrated energy firms like ExxonMobil Corp. (NYSE: XOM), PetroChina Co. Ltd. (NYSE: PTR), Royal Dutch Shell plc (NYSE: RDS.A), etc. The company's activities include: exploration, exploitation and production of oil from reservoir wells, shale and other rocks, and refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
Petrobras ADRs currently retain a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock.
GM Keeps Plants in Force
General Motors Co. (NYSE: GM) announced that it would invest $109 million in its Flint and Bay City operations in Michigan in order to support production of 1.4L Ecotec Engine that will be used in fuel-efficient vehicles such as the Chevrolet Cruze, Volt plug-in hybrid and the Sonic. Chevrolet Sonic will be built at GM's assembly plant in Orion Township, Michigan later this year.
The investment will retain 96 jobs at the plants. It is a part of GM's $2 billion investment plan at 17 assembly and components plants in eight states of U.S. The plan aims at creating or preserving more than 4,000 hourly and salaried jobs at the plants. (See our blog GM to Invest in 17 U.S. Plants)
Of the $109 million, GM will invest $84 million at Flint to increase production capacity for 1.4-liter engines. The remaining $25 million will be invested in Bay City for the production of connecting rods and camshafts used in the engine.
In November last year, GM invested $163.2 million at the Fling, Bay City and Defiance, Ohio plants to support the production of same engines for the Chevrolet Volt, Chevrolet Cruze and a new Chevrolet small car. It saved 184 jobs at the three facilities.
GM revealed that its North American plants are already running at nearly full capacity. At the beginning of the year, the automaker announced its plan to invest $30 million in its stamping plant in Pontiac, Michigan in order to improvise on tooling and equipment that will, in turn, enhance the plant's manufacturing capabilities.
It also plans to invest $100 million in its 72-year old Rochester plant in New York that was almost on the verge of closing. The company decided to continue running the plant as the workers agreed to "second-tier" wage levels.
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