Back to top

Analyst Blog

Phillips 66 (PSX - Analyst Report) posted adjusted third quarter 2013 earnings of 87 cents per share, missing the Zacks Consensus Estimate of 91 cents by 4.4%.

The quarterly earnings compare unfavorably with $2.97 per share earned a year ago. The decline was mainly due to lower refining margins partially compensated by higher profits from the chemicals business.

Also, during the reported quarter, the company successfully completed the initial public offering of its master limited partnership Phillips 66 Partners (PSXP - Snapshot Report), to unlock value of its midstream business.

Segment Results


The segment generated adjusted earnings of $148 million compared with $88 million in the comparable quarter last year. The increase was backed by improved margins resulting from higher throughput fees and volume growth.


The segment generated adjusted earnings of $262 million compared with $275 million in the comparable quarter last year. Higher costs and lower volumes were responsible for the decline, which was partially offset by improved margins at the Olefins and Polyolefins business.


The segment digested a loss of $2 million compared with earnings of $1.5 billion in the year-ago quarter. The dismal results can be traced to to lower realized refining margins, owing to approximately 40% decline in the average worldwide market crack spread. Realized margins also decreased due to tightening crude differentials, particularly in the Gulf Coast, Central Corridor and Western/Pacific regions.

Marketing and Specialties (M&S)

Segmental earnings were $240 million, up $142 million from the same quarter last year. The segment benefited from higher margins and decreased costs.

Financial Condition

In the reported quarter, Phillips 66 generated $1.9 billion of cash from operations, $1.1 billion in proceeds from asset dispositions and $404 million in net proceeds from Phillips 66 Partners' initial public offering.

As of Sep 30, 2013, cash and cash equivalents were $5.9 billion, with a year-to-date annualized return on capital employed ratio of 15% and a year-to-date annualized adjusted return on capital employed (ROCE) of 14%.

Zacks Rank

The stock retains a Zacks Rank #4 (Sell). However, there are certain Zacks Ranked #1 stocks – Matador Resources Co. (MTDR - Snapshot Report) and Northern Oil and Gas, Inc. (NOG - Snapshot Report) – that appear rewarding in the short term.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SIGNET JEWE… SIG 116.37 +7.72%
CHYRONHEGO… CHYR 2.72 +5.84%
US SILICA H… SLCA 70.72 +4.00%
MALLINCKROD… MNK 80.11 +2.32%
RF MICRO DE… RFMD 11.76 +2.31%