Wednesday, May 18, 2011

Investopedia: Petrobras And Brazil's Wall Of Worry

What happened to Brazil? Once one of the darlings of the international investment community, Brazil has not done so well of late. Beset by worries of inflation and increasing government interference, Brazil's markets have lost a little luster. 


This is still a high-quality growth emerging market, though, and investors looking to play an eventual recovery in investor interest should give some thought to Petrobras (NYSE:PBR) - one of largest and best-known Brazilian companies.


A Strong Start to the Year
Petrobras got 2011 off to a good start. Net operating revenue rose 9% from last year (and 1% from the fourth quarter), helped by very strong price realizations in the E&P segment, as well as some modest production volume growth. Petrobras is still very much a Brazil play, as less than 10% of the company's oil and gas production comes from outside Brazil.

Gross profit rose 11% from last year, but operating income performance was flat (though up 26% sequentially). Operating income improved significantly in E&P, with 18% annual growth, but the refining business reversed to a loss due to the pressures of higher crude costs and frozen domestic pricing on refined products. The gas and electricity segment was also a strong performer (up 34% from last year), but is relatively small at less than 6% of total operating income. (For more, see Bargains In Brazil.)



To read the full piece, please click the link:
http://stocks.investopedia.com/stock-analysis/2011/Petrobras-And-Brazils-Wall-Of-Worry-PBR-APA-STO-BP-LUKOY-SLB-RIG0518.aspx

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