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Phillips 66 (PSX) Beats on Q4 Earnings on Refining Strength
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Phillips 66 (PSX - Free Report) posted fourth-quarter 2018 adjusted earnings per share of $4.87, which surpassed the Zacks Consensus Estimate of $2.76. The bottom line increased from the year-ago quarter’s $1.07. The strong earnings performance was backed by significant improvement in realized refining margin. This was partially offset by turnaround activities in Chemicals businesses.
Investors should know that following Phillips’ strong earnings, the stock rallied almost 5% in the pre-market trading session.
Quarterly revenues totaled $29.8 billion, down from the year-ago quarter’s $30.1 billion. The top line also missed the Zacks Consensus Estimate of $35.5 billion.
Segment Results
Midstream
The segment generated adjusted quarterly earnings of $409 million, up from $196 million in the year-ago quarter on increased pipeline throughput volumes.
Chemicals
The segment generated adjusted earnings of $152 million, down from $161 million in the year-ago quarter, owing to turnaround activities along with a drop in seasonal sales volumes
Refining
The segment’s adjusted earnings surged to $2,008 million from $510 million in the prior-year quarter, thanks to significant improvement in realized refining margin owing to plunge in oil prices through the December quarter of 2018. During the quarter, Phillips 66’s refining utilization was 99%.
Marketing and Specialties (M&S)
This segment’s earnings increased from $168 million in the year-ago quarter to $592 million.
Financial Condition
In the reported quarter, Phillips 66 generated $4,139 million of cash from operations. Through dividends and share repurchases, the company returned capital worth $864 million to stockholders.
As of Dec 31, cash and cash equivalents were $3,019 million along with debt of $11.2 billion. The company’s debt-to-capitalization ratio was 29%.
Zacks Rank and Key Picks
Currently, Phillips 66 carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the energy space are Jones Energy, Inc. (JONE - Free Report) , Golar LNG Partners LP and Sunoco LP (SUN - Free Report) . Jonescarries a Zacks Rank #2 (Buy), while Golar LNG and Sunoco sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Jones Energy expects 2019 earnings growth of 19% year over year.
Golar LNG delivered average positive earnings surprise of 92.8% in the preceding four quarters.
Sunoco LP pulled off average positive earnings surprise of 18.39% in the trailing four quarters.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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Phillips 66 (PSX) Beats on Q4 Earnings on Refining Strength
Phillips 66 (PSX - Free Report) posted fourth-quarter 2018 adjusted earnings per share of $4.87, which surpassed the Zacks Consensus Estimate of $2.76. The bottom line increased from the year-ago quarter’s $1.07. The strong earnings performance was backed by significant improvement in realized refining margin. This was partially offset by turnaround activities in Chemicals businesses.
Investors should know that following Phillips’ strong earnings, the stock rallied almost 5% in the pre-market trading session.
Quarterly revenues totaled $29.8 billion, down from the year-ago quarter’s $30.1 billion. The top line also missed the Zacks Consensus Estimate of $35.5 billion.
Segment Results
Midstream
The segment generated adjusted quarterly earnings of $409 million, up from $196 million in the year-ago quarter on increased pipeline throughput volumes.
Chemicals
The segment generated adjusted earnings of $152 million, down from $161 million in the year-ago quarter, owing to turnaround activities along with a drop in seasonal sales volumes
Refining
The segment’s adjusted earnings surged to $2,008 million from $510 million in the prior-year quarter, thanks to significant improvement in realized refining margin owing to plunge in oil prices through the December quarter of 2018. During the quarter, Phillips 66’s refining utilization was 99%.
Marketing and Specialties (M&S)
This segment’s earnings increased from $168 million in the year-ago quarter to $592 million.
Financial Condition
In the reported quarter, Phillips 66 generated $4,139 million of cash from operations. Through dividends and share repurchases, the company returned capital worth $864 million to stockholders.
As of Dec 31, cash and cash equivalents were $3,019 million along with debt of $11.2 billion. The company’s debt-to-capitalization ratio was 29%.
Zacks Rank and Key Picks
Currently, Phillips 66 carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the energy space are Jones Energy, Inc. (JONE - Free Report) , Golar LNG Partners LP and Sunoco LP (SUN - Free Report) . Jonescarries a Zacks Rank #2 (Buy), while Golar LNG and Sunoco sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Jones Energy expects 2019 earnings growth of 19% year over year.
Golar LNG delivered average positive earnings surprise of 92.8% in the preceding four quarters.
Sunoco LP pulled off average positive earnings surprise of 18.39% in the trailing four quarters.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>