Phillips 66 Q3 Earnings Beat Estimates, Increase Y/Y

Phillips 66 (PSX – Free Report) posted adjusted third-quarter 2017 earnings of $1.66 per share that beat the Zacks Consensus Estimate of $1.62. The bottom line also increased from $1.05 in the year-ago quarter. The growth came on the back of higher contribution from the Refining segment.

Quarterly revenues of $26,206 million lagged the Zacks Consensus Estimate of $29,945 million. Revenues also declined from the year-ago quarter’s level of $22,042 million.

Segmental Results

Midstream

The segment generated adjusted quarterly earnings of $67 million compared with $75 million in the year-ago quarter. The decline is mainly attributable to adverse impacts of natural calamities.

Chemicals

The segment reported adjusted earnings of $153 million as against $190 million in the year-earlier quarter. Lower margins and volume led to the drop.

Refining

The segment’s adjusted earnings were $548 million compared with earnings of $134 million in the prior-year quarter. Higher distillate and gasoline margins led to the growth. During the quarter, Phillips 66’s refining utilization was 98% and clean product yield was 85%.

Marketing and Specialties (M&S)

This segment reported adjusted earnings of $211 million compared with $267 million in the year-ago quarter.
 
Financial Condition

In the reported quarter, Phillips 66 generated $401 million of cash from operations. It also returned capital worth $817 million to shareholders. Of this, $356 million was disbursed as dividends, while $461 million was utilized to repurchase common stock.

As of Sep 30, 2017, the company had cash and cash equivalents of $1,547 million and debt of $10,201 million. The company’s debt-to-capitalization ratio was 30%.

Capital Expenditure Guidance

Phillips 66 has lowered its capital expenditures for 2017 to $2 billion from $2.7 billion. Postponement of a final investment decision relating to incremental fractionation capacity is mainly responsible for the reduction. For 2018, capital expenditure is expected between $2 billion and $3 billion.