Phillips 66 $PSX Earnings Strength From Refining and Petrochemicals

Houston based oil refiner Phillips 66 $PSX on Tuesday reported better than expected2Q17 earnings as refining and petrochemical revenues strengthened. Refining is recovering some after low fuel prices hit profit margins.

Houston based oil refiner Phillips 66 $PSX on Tuesday reported better than expected2Q17 earnings as refining and petrochemical revenues strengthened. Refining is recovering some after low fuel prices hit profit margins.

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While Phillips 66 is diversifying from refining in both it’s chemical and pipeline sectors $224 million in earnings came from refining. Phillips 66 now labels itself an energy manufacturing and logistics company. The refining sector is recovering some after low fuel prices aligned to weak crude oil prices, shrinking profit margins.

Earnings: $550 million or $1.06 per share, vs. $496 million or $0.93 per share a year ago. Excluding special items, adjusted earnings were $569 million or $1.09 per share. Revenue $24.6 billion versus $22.3 billion during the same time last year. 

Reaction: Phillips 66 NYSE: PSX Aug 1 open 85.16 +1.41 (+1.68%)

In other segments the controversial Dakota Access Pipeline, which Phillips 66 owns 25 percent of, came online in the second quarter. It’s joint venture, Chevron Phillips Chemical, is due to complete a massive, $6 billion chemicals and plastics expansion in Baytown and Sweeny by the end of the year.

Financial Position, Liquidity and Return of Capital

Phillips 66 generated $1.9 billion in cash from operations during the second quarter, including $422 million of cash distributions from equity affiliates. Excluding working capital impacts, operating cash flow was $1.2 billion.

During the quarter, Phillips 66 funded $458 million of capital expenditures and investments, and distributed $360 million in dividends and $381 million in share repurchases. The company ended the quarter with 512 million shares outstanding.

As of June 30, 2017, cash and cash equivalents were $2.2 billion, and consolidated debt was $10.0 billion, including $2.3 billion at Phillips 66 Partners (PSXP). The company’s consolidated debt-to-capital ratio and net-debt-to-capital ratio were 30 percent and 25 percent, respectively. Excluding PSXP, the debt-to-capital ratio was 26 percent and net-debt-to-capital ratio was 20 percent

Source: Phillips 66

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