Back to top

Image: Bigstock

Phillips 66 (PSX) Q4 Earnings Miss on Lower Refining Margin

Read MoreHide Full Article

Phillips 66 (PSX - Free Report) posted adjusted fourth-quarter 2016 earnings of 16 cents per share that missed the Zacks Consensus Estimate of 39 cents and also came in below the year-ago figure of $1.31 million. Lower refining margins due to reduced market crack spread resulted in the underperformance. The negatives were mitigated to some extent by improved midstream business.

Quarterly revenues of $23,668 million surpassed the Zacks Consensus Estimate of $21,614 million as well as the year-ago quarter figure of $22,029 million.     

Segmental Results

Midstream

The segment posted quarterly loss of $1 million, substantially narrower than a loss of $77 million in the year-ago quarter.

Chemicals

The segment reported earnings of $136 million as against $212 million in the year-earlier quarter. Higher turnaround activity led to the decrease.

Refining

The segment incurred loss of $38 million, which compared unfavorably with earnings of $410 million in the prior-year quarter. Decreased realized margins owing to lower market crack spread resulted in the underperformance.

Marketing and Specialties (M&S)

This segment recorded earnings of $190 million compared with $231 million in the year-ago quarter.

Financial Condition

In the reported quarter, Phillips 66 generated $667 million of cash from operations. It also returned capital worth $558 million to shareholders.

As of Dec 31, 2016, the company had cash and cash equivalents of $2.7 billion and debt of $10.1 billion. The company’s debt-to-capitalization ratio was 30%.

Price Performance

In the last three months, Phillips 66 shares underperformed the Zacks categorized Oil Refining & Marketing industry. During the aforesaid period, the company’s shares gained 3.2% compared with 10% improvement for the broader industry.  

Zacks Rank

Phillips 66 currently has a Zacks Rank #3 (Hold). 

Some better-ranked players in the energy sector include Imperial Oil Limited (IMO - Free Report) , Suncor Energy Inc. (SU - Free Report) and Denbury Resources Inc. . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

For 2017, Imperial Oil is anticipated to post year-over-year earnings growth of 386.6%

Suncor posted an average earnings surprise of 40.55% in the last four quarters.

Denbury surpassed the Zacks Consensus Estimate in each of the last four quarters with an average earnings surprise of 283.33%.

The Best Place to Start Your Stock Search

Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Suncor Energy Inc. (SU) - free report >>

Imperial Oil Limited (IMO) - free report >>

Phillips 66 (PSX) - free report >>