Why Petrobras (PBR) Stock Dipped To A Ten-Year Low

Petroleo Brasileiro Petrobras SA (ADR)  (NYSE:PBR) closed lower by 4.18% to $7.11 on Friday, after charges were declared against 36 suspects in Brazil's corruption scandal in which companies allegedly bribed public officials and overcharged the state-run energy organization.

Former director of Petrobras' refining division, Paulo Roberto Costa, was charged along with 23 executives from major Brazilian construction companies.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

• The income increase came in higher than the industry average of 6.3%. Since the same quarter one year prior, incomes slightly improved by 3.8%. This growth in income does not show to have trickled down to the organization's bottom line, displayed by a refuse in earnings per share.

• The debt-to-equity ratio is somewhat low, currently at 0.84, and is less than that of the industry average, implying that there has been a relatively successful effort in the administration of debt levels. Along with the favorable debt-to-equity ratio, the organization maintains an adequate quick ratio of 1.30, which illustrates the ability to avoid short-term cash problems.

• PETROBRAS-PETROLEO BRASILIER's earnings per share disclosed by 21.7% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the organization has sound organization over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, PETROBRAS-PETROLEO BRASILIER's EPS of $1.70 remained unchanged from the prior years' EPS of $1.70. This year, the market expects an improvement in earnings ($2.99 versus $1.70).

• The organization, on the basis of change in net revenue from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net revenue has significantly declined 25.7% when compared to the same quarter one year ago, falling from $2,996.00 million to $2,225.00 million.

• The company's current return on equity has slightly down from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PETROBRAS-PETROLEO BRASILIER's return on equity is significantly that of the industry average and is below that of the S&P 500.