Petrobras nyse Pbr Stock Tanks 11 in Single Day What Went Wrong

Petrobras (NYSE: PBR) Stock Tanks 11% in Single Day – What Went Wrong?

Petrobras Brasileiro (NYSE: PBR) stock tumbled over 11% on Friday following the release of its Q4 financial report, which revealed a decrease in net profit and smaller-than-expected dividends to shareholders.

Petrobras Brasileiro (NYSE: PBR) has announced its latest dividend distribution plan, approving 1.10 reais per share, totaling 14.2 billion reais ($2.9 billion) for the fourth quarter. The decision not to pay extraordinary dividends for the full year has drawn attention, particularly as analysts, according to Bloomberg, had anticipated higher payouts of $3.7 billion and at least $3 billion in special dividends.

Investor concerns have been on the rise concerning potential cuts in payouts. CEO Jean Paul Prates indicated last week that Petrobras (PBR) aims to exercise caution in issuing significant dividends as it plans to allocate more resources toward wind, solar, and biofuel projects.

Brazilian President Luiz Inacio Lula da Silva has voiced criticism against Petrobras (PBR), characterizing it as a cash cow for private investors at the expense of allocating more resources towards refining and energy transition initiatives.

Petrobras Q4 Results

Petrobras (PBR) reported a 6.3% year-on-year decrease in net recurring profit to 41 billion reais (about $8.31 billion) and an 8.5% decline in adjusted EBITDA to 66.85 billion reais for the fourth quarter. These figures fell short of analyst expectations, with predictions from analysts polled by LSEG pegging profit at 35.3 billion reais and adjusted EBITDA at 76.3 billion reais.

Fourth-quarter revenues surged by 15.3% year-on-year to 134.3 billion reais, while oil production for the same period increased by 1.9% quarter-on-quarter to 2.36 million barrels per day. Total hydrocarbon production saw a 2% uptick to 2.9 million boe/day.

For the full year, Petrobras (PBR) reported a net recurring income of 136 billion reais, marking a 24.2% year-on-year decline but surpassing the analyst consensus estimate of 125 billion reais.

Petrobras disclosed that its full-year capital spending amounted to $12.7 billion, a notable increase of 29% compared to 2022. The company attributed this uptick to higher expenditures on its pre-salt oil fields.

Petrobras (NYSE: PBR) Stock Reaction

PBR stock plunged 11.50% to close at $14.78 on Friday. The traders had exchanged hands with 103,077,240 (103.077 million) shares compared to the average daily trading volume of 15.15 million.