Back to top

Image: Bigstock

Phillips 66 (PSX) Sees US Storm Impact on Q1 Bottom Line

Read MoreHide Full Article

Phillips 66 (PSX - Free Report) has provided preliminary financial information about the March quarter of this year.

The diversified energy manufacturing and logistics company announced that its operations in the Central and Gulf Coast regions were significantly affected by the severe winter storms. Notably, the storm caused havoc to power and gas supply systems in U.S. central and southern states, thereby affecting the utilization of the company’s assets. The storm also led the company to face higher expenses associated to utility, maintenance and repair across its Midstream, Chemicals and Refining business units. With the surge in natural gas and electricity prices across several markets, following the winter storm-induced supply outages, the company witnessed an uptick in utility expenses.

The company added that dented global demand for refined petroleum products owing to the coronavirus pandemic continued to hurt its Refining and Marketing and Specialties segments in the first quarter of this year. It is to be noted that the company projects its utilization of the chemical plants at mid-70% in the March quarter, lower than its prior guidance of mid-90%.

Importantly, Phillips 66 projects adjusted net loss of $550 million to $700 million for the first quarter. This is owing to the fierce winter storm that hurt the production line and also bumped up costs. The storm is also expected to impact Exxon Mobil Corporation’s (XOM - Free Report) first-quarter earnings. Recently, ExxonMobil expressed concerns regarding the Texas winter storm having hit its first-quarter 2021 earnings by as much as $800 million.

Currently, Phillips 66 carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy sector include Diamondback Energy, Inc. (FANG - Free Report) and Matador Resources Company (MTDR - Free Report) . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Diamondback is likely to see earnings growth of 112.5% in 2021.

Matador is likely to see earnings growth of 300% in 2021.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?

Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

Access Zacks Top 10 Stocks for 2021 today >>

Published in