Petrobras $7.2 Billion Profit Lifts Stock as Ibovespa Fluctuates

Petrobras $7.2 Billion Profit Lifts Stock as Ibovespa Fluctuates

by Denyse Godoy/Bloomberg
9:49 AM BRT
May 18, 2015

Surprising earnings at Petroleo Brasileiro SA, the oil producer at the center of Brazil’s largest corruption probe, sent its shares to a six-month high. The Ibovespa fluctuated.
The company posted $7.2 billion in a measure of earnings, beating estimates, after a fuel price increase allowed its refining and supply unit to turn profitable for the first time since 2010. The report came three weeks after Petrobras ended an internal debate on graft writedowns by disclosing audited 2014 results, clearing the way to renter credit markets.
“Petrobras’s first-quarter earnings were really positive, and the mood seems better now,” Pedro Paulo Silveira, chief economist at brokerage firm TOV Corretora, said in a telephone interview from Sao Paulo.
Chief Executive Officer Aldemir Bendine is seeking to contain damage from the scandal — a decade of alleged kickbacks and inflated construction contracts — as he also grapples with a plunge in oil.
Petrobras rallied 2.7 percent to 14.44 reais, set for the highest close since Nov. 4. The Ibovespa dropped less than 0.1 percent to 57,222.34 at 10:40 a.m. in Sao Paulo, after gaining as much as 0.6 percent. Stock options on the Brazilian exchange expire Monday.
Brazilian equities entered a bull market last month, after rallying more than 20 percent from their January low, on prospects government spending cuts and the release of Petrobras’s results would prevent a sovereign rating downgrade.