Petrobras Slashes Dividend 15% After Q1 Miss, Wins Santos Basin Deal
PBR•Petrobras reported first-quarter EPS and revenue that fell below consensus, with shares trading at a forward P/E of roughly 4.8x after a 15% year-on-year dividend cut targeting a ~50% payout ratio. Baker Hughes won an extension to supply AutoTrak steerable systems, logging-while-drilling tools and extended-life bits in the Santos Basin to boost deepwater output.
1. Q1 Earnings and Revenue Miss
Petrobras reported first-quarter EPS and revenue that fell short of consensus estimates, with its shares now trading at a forward P/E of approximately 4.8x. Lower oil spreads weighed on top-line results despite stable production volumes across key basins.
2. Dividend Reduction and Valuation
The company reduced its annual dividend by 15% year-on-year, setting a target payout ratio near 50% to preserve cash amid Brazil-specific political and debt headwinds. This adjustment recalibrates forward yield expectations and aligns with broader capital allocation strategies.
3. Santos Basin Contract Extension
Baker Hughes secured an extension to provide AutoTrak rotary steerable systems, logging-while-drilling tools and Dynamus extended-life drill bits across several Santos Basin fields. The deal is designed to improve drilling efficiency and reservoir access in deepwater pre-salt operations.
