The company earned 10.85 billion reals ($5.71 billion as of the end of the quarter), or 1.24 reals per share ($1.40 per ADR), nearly double the 5.53 billion reals it chalked up in the year-ago quarter. Analysts had been looking for income of about 10.1 billion reals on revenue of 56.1 billion reals. Petrobras's total oil and gas production was up 5.5% year over year. For the third quarter, average oil prices on the New York Mercantile Exchange were up 57% year over year.
Petrobras thus joins such other international oil companies as Exxon Mobil
Petrobras has lately been the darling of the oil patch, with several major discoveries in the deep waters off its coast. For instance, its Tupi field appears to contain about 8 billion barrels of oil, making it the largest discovery in North or South America during the past three decades.
But with the world being hit by a worsening credit crunch, and crude prices now below $60 per barrel, the company's ability to finance the development of its discoveries has become questionable. As a result, in December, management will release a review of its 2009-2013 investment plan, which had been expected last month.
In the meantime, the company is keeping deepwater drillers Transocean
Like most energy companies, Petrobras has seen its shares slide like tots on a playground since spring. My advice to Fools is to wait until the current crude-price retreat appears to have run its course, and then to consider slowly acquiring the company's shares with an eye to long-term appreciation.
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