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Phillips 66 (PSX) Q1 Earnings Beat on Higher Refining Margins

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Phillips 66 (PSX - Free Report) reported first-quarter 2022 adjusted earnings per share of $1.32, comfortably beating the Zacks Consensus Estimate of $1.14. The bottom line also turned around from a loss of $1.16 per share in the year-ago quarter.

Total quarterly revenues of $36,722 million beat the Zacks Consensus Estimate of $29,789 million. The top line also improved from the year-ago quarter’s $21,927 million.

The strong quarterly results were driven by stronger refining margins on a worldwide basis.

Phillips 66 Price, Consensus and EPS Surprise

 

Phillips 66 Price, Consensus and EPS Surprise

Phillips 66 price-consensus-eps-surprise-chart | Phillips 66 Quote

Segmental Results

Midstream

The segment generated adjusted pre-tax quarterly earnings of $242 million, down from $276 million in the year-ago quarter. Lower contributions from transportation, NGL and other activities hurt the segment.

Chemicals

It recorded adjusted pre-tax earnings of $396 million, up from $184 million in the prior-year quarter. Contributions from the olefins and polyolefins businesses primarily aided the segment.

Refining

It reported adjusted pre-tax earnings of $140 million against the year-ago loss of $1 billion. The segment was backed by increased volumes and realized margins.

The segment’s realized refining margins worldwide improved to $10.55 per barrel from the year-ago quarter’s $4.36. The same in the Central Corridor and Atlantic Basin/Europe increased to $7.89 and $11.71 per barrel from the year-ago levels of $5.97 and $4.86, respectively.

In the Gulf Coast, the metric registered an improvement to $7.71 per barrel from $3.39 in the prior-year quarter. The West Coast witnessed an increase in margins from $3.33 per barrel in the year-ago quarter to $17.68 in the March-end quarter of 2022.

Marketing and Specialties

Pre-tax earnings increased to $316 million from $290 million in the year-ago quarter.

While realized marketing fuel margins in the United States declined to $1.59 per barrel from the year-ago quarter’s $1.94, the same in international markets declined to $2.30 from the year-ago level of $4.01.

Costs and Expenses

Total costs and expenses in the first quarter increased to $35,894 million from $22,698 million in the year-ago period.

Financial Condition

For the reported quarter, Phillips 66 generated $1,136 million of net cash from operations, up from $271 million a year ago. Its capital expenditure and investments totaled $370 million. It paid out dividends of $404 million in the reported quarter.

As of Mar 31, 2022, cash and cash equivalents were $3.3 billion. The company’s total liquidity was $9 billion. Consolidated debt was $14.4 billion, reflecting a debt to capitalization of 39%.

Zacks Rank

Phillips 66 currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A Glimpse of Q1 Results

Schlumberger (SLB - Free Report) announced first-quarter earnings of 34 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 32 cents. The strong quarterly results were primarily driven by strong drilling activities in North America, Latin America and the Middle East.

Schlumberger’s board of directors approved a quarterly cash dividend of 17.5 cents per share of outstanding common stock. This suggests a 40% increase from the prior quarterly cash dividend of 12.5 cents per share. The dividend is payable on Jul 14, 2022, to stockholders of record as of Jun 1, 2022.

Baker Hughes (BKR - Free Report) reported first-quarter adjusted earnings of 15 cents per share, missing the Zacks Consensus Estimate of 19 cents. The lower-than-expected results were caused by a decline in cost productivity and inflation pressures in Digital Solutions.

As of Mar 31, 2022, Baker Hughes had cash and cash equivalents of $3,191 million. At the first-quarter end, the company had long-term debt of $6,650 million, implying a debt-to-capitalization of 28.9%.

Valero Energy Corporation (VLO - Free Report) has reported first-quarter 2022 adjusted earnings of $2.31 per share, improving from a loss of $1.73 in the year-ago quarter. The strong quarterly results have been driven by increased refinery throughput volumes and a higher refining margin.

At the first-quarter end, Valero had cash and cash equivalents of $2,638 million. As of Mar 31, 2022, it had total debt and finance lease obligations of $13,161 million. Through the March-end quarter, Valero returned $545 million to stockholders as dividend payments.