SAO PAULO/RIO DE JANEIRO (Reuters) - Profit at Brazilian state-controlled oil firm Petróleo Brasileiro SA probably rose to the highest level in almost two years in the first quarter, benefiting from stringent cost-cutting and one-time gains from the $5.2 billion sale of a natural gas pipeline unit, analysts said on Tuesday.
Net income at Rio de Janeiro-based Petrobras likely came in at 3.773 billion reais ($1.2 billion) in the quarter, reversing a loss of 1.246 billion reais a year earlier, according to the average consensus of estimates compiled by Thomson Reuters. Fourth-quarter profit was 2.510 billion reais.
Petrobras will release results after markets close on Thursday. Executives will discuss the numbers with reporters right after the release, and with investors on Friday.
Chief Executive Officer Pedro Parente has reined in costs, enhanced field efficiency and scaled down revisions to the value of some assets to bolster profitability and free-cash-flow generation. Such moves have mitigated the impact of a corruption probe that triggered large impairments and investor lawsuits.
A stable currency in the first quarter helped bring down debt-servicing costs for Petrobras, the world's most indebted major oil firm. Average Brent crude oil prices rose 2 percent in the quarter, helping offset slightly lower output and rising lifting costs, analysts said.
Propping up profit, Petrobras could book a significant one-off gain from the divestiture of gas pipeline unit Nova Transportadora do Sudeste SA to a Brookfield Asset Management Inc-led group. Some analysts are expecting the NTS sale to produce a pre-tax gain of over $1.9 billion for Petrobras.
Investors are likely to focus on management comments about the status of Petrobras' $21 billion, two-year asset sale plan, the outlook for production and capital spending this year, and how the company will provision against 216 billion reais of contingent liabilities, analysts said.
Petrobras' preferred shares, the company's most widely traded class, are down 5.8 percent over the past three months, trailing a 2.4 percent gain in Brazil's benchmark Bovespa stock index in the same period.
The stock performance is due in part to delays in Parente's plan to divest assets not deemed essential, in the midst of tougher regulatory oversight, the size of contingent liabilities and, especially, concern of declining oil prices, analysts said.
Net revenue is seen at 68.828 billion reais last quarter, according to an average consensus estimate, down 2 percent on both an annual and quarterly basis. Adjusted earnings before interest, taxes, depreciation and amortization are expected at 23.874 billion reais, up 13 percent on an annual basis.
Editing by Leslie Adler