Phillips 66 Jumps on Strong Refining Margins
Phillips 66 (NYSE: PSX) reported second-quarter earnings of $1.86 per share and $47.83 billion in revenue before markets opened this morning. Earnings per share (EPS) rose from the year-ago total of $1.64, and revenue fell from last year’s second-quarter total…
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The oil refining and marketing company offered no additional guidance. The current consensus estimate for the third quarter calls for EPS of $1.54, as well as full-year EPS of $5.21 on full-year revenue of $186.29 billion. The company previously announced a $1 billion share repurchase program.
The company’s chairman and CEO referred to the company’s recent spin-off from ConocoPhillips (NYSE: COP):
We’re off to a solid start, running well in a positive margin environment. The location of our domestic refining, midstream and chemicals facilities enabled us to access advantaged feedstocks, creating strong earnings and cash flow.
Phillips 66 sold assets worth $234 million in the quarter, including its refinery in Trainer, Penn. In the company’s refining and marketing segment, revenue rose nearly 53%, chiefly due to much better refining margins in the U.S. Midwest and in Europe. In the not-so-good news department, the company took a noncash charge of $170 million on its investment in the Rockies Express pipeline, causing the company’s midstream segment to report a loss of $91 million for the quarter.
Shares are up more than 5% in premarket trading at $39.50, a new post-IPO high if it holds during the trading day. The current 52-week range is $28.75 to $38.36. Thomson Reuters had a consensus analyst price target of $42.90 before today’s results were announced.
Paul Ausick
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
