Petrobras Q2 Profit Rises...Barely

Petrobras (NYSE: PBR), Latin America's largest company by market value, said its second-quarter profit rose to $4.7 billion from $4.6 billion a year earlier. Revenue rose to $30.2 billion from $25.1 billion. Analysts had been expecting a profit of $4.5 billion.

While the results beat estimates, Petrobras still lagged far behind the profit results posted by integrated oil companies of comparable size.

Petrobras said the relative fall in profitability was caused by a big increase in demand for diesel in Brazil which coincided with maintenance shut-downs at Petrobras's refineries, meaning the company had to sell imported diesel at smaller margins, according to the Financial Times.

The company saw its debt as a percentage of assets jump to 34% in the quarter from 28% a year earlier. A move above 35% could imperil the company's investment grade credit rating. Petrobras said earlier this year it is not planning any new bond issues.