Yahoo Finance Phillips 66 (PSX) Q1 Earnings Miss, Revenues Increase Y/Y
Phillips 66 PSX has reported first-quarter 2024 adjusted earnings of $1.90 per share, which missed the Zacks Consensus Estimate of $2.05. The bottom line was significantly lower than the year-ago quarter’s $4.21.
Total quarterly revenues of $36.4 billion beat the Zacks Consensus Estimate of $31 billion. The top line also improved from the year-ago quarter’s $35.1 billion.
Weak quarterly earnings can be primarily attributed to lower refining margins worldwide and increased expenses.
Phillips 66 Price, Consensus and EPS Surprise
Phillips 66 price-consensus-eps-surprise-chart | Phillips 66 Quote
Segmental Results
Midstream:
The segment generated adjusted pre-tax quarterly earnings of $613 million, down from $678 million in the year-ago quarter. The reported figure surpassed our estimate of $577.6 million. The decline primarily resulted from reduced throughput and deficiency revenues, partly mitigated by lower maintenance costs due to seasonal factors.
Chemicals:
The unit recorded adjusted pre-tax earnings of $205 million, up from $198 million in the prior-year quarter. The reported figure also surpassed our estimate of $127 million. The rise in profits was primarily attributed to increased margins in polyethylene, fueled by higher sales prices and a decrease in feedstock costs. Additionally, lower turnaround costs contributed to this improvement.
Refining:
The segment reported adjusted pre-tax earnings of $228 million, down from $1.6 billion in the year-ago quarter. The reported figure also missed our projection of $1.1 billion. The decrease was mainly attributed to a drop in realized margins, driven by less favorable commercial outcomes, impacts of inventory hedging and reduced realizations for clean products on the Gulf Coast.
Refining’s realized refining margins worldwide declined to $10.91 per barrel from the year-ago quarter’s $20.72. The same in the Central Corridor and Atlantic Basin/Europe declined to $13.27 and $9.55 per barrel from the year-ago quarter’s $26.86 and $16.13, respectively.
The West Coast’s margins declined to $8.89 per barrel from $16.53 in the year-ago quarter. In the Gulf Coast, the metric declined to $10.91 per barrel from $21.28 a year ago.
Marketing & Specialties
Pre-tax earnings declined to $345 million from $426 million in the year-ago quarter. The reported figure lagged our projection of $546 million. The decline in first-quarter earnings primarily resulted from reduced domestic marketing and lubricant margins.
Realized marketing fuel margins in the United States declined to $1.60 per barrel from the year-ago quarter’s $2.30. Yet, the same in the international markets increased to $6.92 from $6.45 a year ago.
Costs & Expenses
Total costs and expenses in the first quarter increased to $35.5 billion from $32.4 billion in the year-ago period. The reported figure lagged our projection of $38.4 billion.
Financial Condition
For the reported quarter, Phillips 66 generated $236 million of net cash from operations, significantly down from $1.2 billion a year ago. The company’s capital expenditure and investments totaled $628 million. It paid out dividends of $448 million in the first quarter.
As of Mar 31, 2024, cash and cash equivalents were $1.6 billion. The total debt was $20.2 billion, reflecting a debt-to-capitalization of 40%.
Zacks Rank & Other Stocks to Consider
Phillips 66 currently carries a Zacks Rank #2 (Buy).
Investors interested in the energy sector may look at some better-ranked companies mentioned below. The three companies mentioned below presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy Company SM is an independent oil and gas company engaged in the exploration, exploitation, development, acquisition and production of oil and gas in North America.
The Zacks Consensus Estimate for SM’s 2024 and 2025 EPS is pegged at $6.15 and $6.73, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
Hess Corporation HES is a leading oil and natural gas exploration and production company. The exploration and production company’s oil and gas proved reserves increased last year by more than 8% year over year.
The Zacks Consensus Estimate for HES’s 2024 and 2025 EPS is pegged at $8.62 and $11.45, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
YPF Sociedad Anonima YPF is a vertically integrated energy company primarily engaged in the oil and gas sector. The company operates in both upstream and downstream activities, including the exploration, production and refining of crude oil and natural gas.
The Zacks Consensus Estimate for YPF’s 2024 and 2025 EPS is pegged at $6.14 and $7.83, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.
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