Brazilian state-run oil company Petrobras posted a third-quarter net profit of 39.75 billion reais, or 7.1 billion dollars, up 21.5 per cent from a year earlier, but the result still fell short of what analysts had expected.

The profit compared with 47.02 billion reais expected by analysts in an LSEG poll, Reuters reported. Adjusted earnings before interest, taxes, depreciation and amortisation stood at 85.82 billion reais for the July to September quarter, a 34.3 per cent rise, but below the 93.97 billion reais consensus.

Petrobras also raised its planned investments for 2026, even as the softer-than-expected profit disappointed investors who had been watching spending and shareholder payouts.

Revenue beats, earnings miss

On a US accounting basis, the picture was mixed. Petrobras reported third-quarter GAAP earnings per share of 1.20 dollars, missing estimates by 0.12 dollars, while revenue of 32.9 billion dollars rose 40.2 per cent year on year and beat forecasts by 410 million dollars, according to Seeking Alpha.

The gap between rising revenue and a profit miss points to higher costs. Seeking Alpha noted that Petrobras profit missed estimates as spending rose and payouts disappointed, a combination that tends to weigh on the shares of a company whose investors watch its dividend closely.

Petrobras shares in New York closed at 18.28 dollars on Tuesday, down 0.4 per cent on the day, before the results were released after the market close.

Record output behind the sales jump

The revenue jump was built on higher production. Petrobras production rose 12 per cent in the third quarter to a record high, with the company's pre-salt offshore fields continuing to drive output growth.

That production strength, combined with firmer oil prices earlier in the year, lifted the top line sharply. But the profit shortfall against the LSEG consensus shows that higher volumes alone were not enough to offset rising costs and the spending behind the company's investment plans.

What investors watch next

Investors will now focus on how Petrobras balances its investment programme with the cash returns shareholders expect. As a majority state-owned company, Petrobras faces close scrutiny of both its spending plans and its dividend policy, and any shift in either can move the shares sharply.

The company had been expected to report earnings per share of about 1.38 dollars on the adjusted basis tracked by MarketBeat, and instead reported 1.44 dollars on that measure, underlining how different accounting treatments can tell different stories about the same quarter. On the GAAP basis reported by Seeking Alpha, the result was a miss.

With the third-quarter results now out, attention turns to the company's guidance for the rest of the year and to whether the higher investment plan translates into further production growth in 2027.