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Houston based oil refiner Phillips 66 on Friday reported better than expected second quarter earnings shipping higher volumes of crude through its pipelines. $PSX's refining margin shrank 7.4% due to a shortage of low-cost heavy crude,

Phillips66 Station

$PSX is diversifying from refining in both it's chemical and pipeline sectors.

Phillips 66 Inc. (NYSE: $PSX) Earnings Beat Before Open Friday

$3.02 beat $2.74 EPS and $28.52B Beat $28.29 forecast in revenue

Earnings

Phillips 66 (PSX) reported second quarter earnings of Adjusted earnings for Phillips 66 rose to $1.38 billion, or $3.02 per share, in the quarter ended June 30. Analysts on average had expected it to earn $2.74 per share, according to IBES data from Refinitiv 

The oil refiner posted revenue of $28.52 billion in the period, which beat Street forecasts of $28.29 billion

Phillips 66 has an edge over its peers as it is running light sweet crude at two of its three refineries in the Gulf Coast, which is short heavy sour barrels. Refiners in the United States have been struggling to find low-cost heavy crude due to factors including Alberta's output cuts, sanctions on Venezuela and Iran.

 

Phillips 66 NYSE: $PSX

Market Reaction > Pre-market $101.72 USD +0.25 (0.25%)

Highlights

  • Earnings from midstream segment for Phillips 66, which has both wholly owned and joint venture operations, rose nearly 78% to $423 million
  • PSX's refining margin shrank 7.4% to $11.37 per barrel due to a shortage of low-cost heavy crude 
  • Phillips 66  is running light sweet crude at two of its three refineries in the Gulf Coast, which is short heavy sour barrels,
  • Refiners in the United States have been struggling to find low-cost heavy crude due to factors including Alberta's output cuts, sanctions on Venezuela and Iran 
  • The company's refineries had an average utilization rate of 97% in the quarter compared with a 100% in the year-ago period.
  • Income from Marketing and Specialties increased by 14% to $353 million driven by higher marketing and other.
  • Income from Chemicals decreased by 15% to $275 million
  • Income from Refining dropped by 17% to $983 million, due to declines in Gulf Coast and loss in West Coast.
  • During the quarter, Phillips 66 funded $406 million of dividends, $455 million of share repurchases and $631 million of capital expenditures and investments.
  • The company ended the quarter with 449 million shares outstanding. The company increased quarterly dividend by 12.5% to $0.90 per common share.

Phillips 66 Q2 2019 Earnings

Joint Ventures

In Midstream, Phillips 66 announced a joint venture to construct the Liberty Pipeline that will provide crude oil transportation from the Rockies and Bakken production areas to Cushing, Oklahoma.

Phillips 66 also announced a joint venture to construct the Red Oak Pipeline system that will provide crude oil transportation from Cushing and the Permian Basin to multiple destinations along the Gulf Coast, including Corpus Christi, Ingleside, Houston and Beaumont, Texas.

 

 

Source: Phillips 66, Alpha Street

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