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In the last quarter, the company’s adjusted earnings of 67 cents per share came in substantially below the Zacks Consensus Estimate of 86 cents. Nonetheless, investors should note that the company outpaced the Zacks Consensus Estimate in three of the last four quarters.
Let’s see how things are shaping up prior to the announcement.
Factors Likely to Affect Earnings
Phillips 66 – through its extensive infrastructural network – manages 15,000 miles of crude oil, petroleum product and NGL pipeline, 42 finished product terminals, eight liquefied petroleum gas terminals, five crude oil terminals, and one coke exporting facility. The company’s vast range of operations should continue to increase revenues and boost shareholder value in the to-be-reported quarter as well as the coming years.
Phillips 66 remains focused on its supply chain network. To this end, the company invests heavily on transportation and logistics assets. This should enhance its crude extraction capabilities from sources round the globe, thereby boosting its earnings.
However, Phillips 66’s performance is dependent upon sourcing crude from suppliers worldwide. Hence, a steady supply is mandatory for the company to maintain its production volume. Any geo-political disturbance globally can render its refineries idle and hamper its top-line growth.
Also, the company’s profitability depends upon the spread among the margins of refined product prices and crude oil feedstock prices. However, the spread is dependant upon a host of macro factors that are outside the domain of its control.
Moreover, Phillips 66’s chemicals business operates in a highly volatile industry where sales prices are always fluctuating. Notably, the company’s profitability in such a sector is not always guaranteed by controlling the prices of raw materials only.
Earnings Whispers
Our proven model does not conclusively show that Phillips 66 is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESPand a Zacks Rank of #1 (Strong Buy), 2 (Buy)or 3 (Hold) for this to happen. This is not the case here, as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. Both the Most Accurate estimate and the Zacks Consensus Estimate for Phillips 66 stand at 90 cents.
Zacks Rank: Phillips 66 carries a Zacks Rank #5 (Strong Sell). Note that we caution against Sell-rated stocks (Zacks Rank #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies from the same space which, according to our model, have the right combination of elements to post an earnings beat this quarter:
Legacy Reserves LP has an Earnings ESP of +31.58% and a Zacks Rank #1.
Northern Oil and Gas, Inc. (NOG - Free Report) has an Earnings ESP of +20.00% and a Zacks Rank #1.
Spectra Energy Corp (SE - Free Report) has an Earnings ESP of +16.00 % and a Zacks Rank #1.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>
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Phillips 66 (PSX) Q2 Earnings: Disappointment in Store?
Energy manufacturing and logistics company Phillips 66 (PSX - Free Report) is expected to report second-quarter 2016 earnings on Jul 29.
PHILLIPS 66 Price and EPS Surprise
PHILLIPS 66 Price and EPS Surprise | PHILLIPS 66 Quote
In the last quarter, the company’s adjusted earnings of 67 cents per share came in substantially below the Zacks Consensus Estimate of 86 cents. Nonetheless, investors should note that the company outpaced the Zacks Consensus Estimate in three of the last four quarters.
Let’s see how things are shaping up prior to the announcement.
Factors Likely to Affect Earnings
Phillips 66 – through its extensive infrastructural network – manages 15,000 miles of crude oil, petroleum product and NGL pipeline, 42 finished product terminals, eight liquefied petroleum gas terminals, five crude oil terminals, and one coke exporting facility. The company’s vast range of operations should continue to increase revenues and boost shareholder value in the to-be-reported quarter as well as the coming years.
Phillips 66 remains focused on its supply chain network. To this end, the company invests heavily on transportation and logistics assets. This should enhance its crude extraction capabilities from sources round the globe, thereby boosting its earnings.
However, Phillips 66’s performance is dependent upon sourcing crude from suppliers worldwide. Hence, a steady supply is mandatory for the company to maintain its production volume. Any geo-political disturbance globally can render its refineries idle and hamper its top-line growth.
Also, the company’s profitability depends upon the spread among the margins of refined product prices and crude oil feedstock prices. However, the spread is dependant upon a host of macro factors that are outside the domain of its control.
Moreover, Phillips 66’s chemicals business operates in a highly volatile industry where sales prices are always fluctuating. Notably, the company’s profitability in such a sector is not always guaranteed by controlling the prices of raw materials only.
Earnings Whispers
Our proven model does not conclusively show that Phillips 66 is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESPand a Zacks Rank of #1 (Strong Buy), 2 (Buy)or 3 (Hold) for this to happen. This is not the case here, as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. Both the Most Accurate estimate and the Zacks Consensus Estimate for Phillips 66 stand at 90 cents.
Zacks Rank: Phillips 66 carries a Zacks Rank #5 (Strong Sell). Note that we caution against Sell-rated stocks (Zacks Rank #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies from the same space which, according to our model, have the right combination of elements to post an earnings beat this quarter:
Legacy Reserves LP has an Earnings ESP of +31.58% and a Zacks Rank #1.
Northern Oil and Gas, Inc. (NOG - Free Report) has an Earnings ESP of +20.00% and a Zacks Rank #1.
Spectra Energy Corp (SE - Free Report) has an Earnings ESP of +16.00 % and a Zacks Rank #1.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>