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Phillips 66 (PSX) Up 9.4% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Phillips 66 (PSX - Free Report) . Shares have added about 9.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Phillips 66 due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Phillips 66 Misses on Q4 Earnings Estimates
Phillips 66 reported fourth-quarter 2022 adjusted earnings of $4 per share, missing the Zacks Consensus Estimate of $4.34. However, the bottom line improved from $2.94 per share in the year-ago quarter.
Total quarterly revenues of $40,907 million beat the Zacks Consensus Estimate of $34,302 million. The top line also improved from the year-ago quarter’s $33,568 million.
Lower-than-expected quarterly earnings can be primarily attributed to lower contributions from the Chemicals segment. The negatives were partially offset by strong refining margins worldwide.
Segmental Results
Midstream:
The segment generated adjusted pre-tax quarterly earnings of $674 million, up from $634 million in the year-ago quarter. Higher contributions from transportation, and NGL and other aided the segment.
Chemicals:
It recorded adjusted pre-tax earnings of $52 million, down from $424 million in the prior-year quarter. Lower margins and volumes primarily hurt the segment.
Refining:
It reported adjusted pre-tax earnings of $1,626 million, up from $466 million in the year-ago quarter. The segment was backed by increased volumes and realized margins.
The segment’s realized refining margins worldwide improved to $19.73 per barrel from the year-ago quarter’s $11.95. The same in the Central Corridor and Atlantic Basin/Europe increased to $25.03 and $19.58 per barrel from the year-ago levels of $12.60 and $11, respectively.
In the Gulf Coast, the metric registered an improvement to $16.35 per barrel from $10.16 in the prior-year quarter. The West Coast witnessed an increase in margins from $15.80 per barrel in the year-ago quarter to $16.77 in the December-end quarter of 2022.
Marketing and Specialties
Pre-tax earnings increased to $539 million from $471 million in the year-ago quarter.
While realized marketing fuel margins in the United States increased to $2.05 per barrel from the year-ago quarter’s $1.87 per barrel, the same in the international markets increased to $9.94 from the year-ago level of $9.81.
Costs and Expenses
Total costs and expenses in the fourth quarter increased to $38,360 million from $31,941 million in the year-ago period.
Financial Condition
For the reported quarter, Phillips 66 generated $4,750 million of net cash from operations, up from $1,800 million a year ago. The company’s capital expenditure and investments totaled $713 million. It paid out dividends of $456 million in the reported quarter.
As of Dec 31, 2022, cash and cash equivalents were $6.1 billion. The company’s total liquidity was $12.8 billion. Total debt was $17.2 billion, reflecting a consolidated debt to capitalization of 34%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 8.16% due to these changes.
VGM Scores
Currently, Phillips 66 has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Phillips 66 has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Phillips 66 is part of the Zacks Oil and Gas - Refining and Marketing industry. Over the past month, Valero Energy (VLO - Free Report) , a stock from the same industry, has gained 2.3%. The company reported its results for the quarter ended December 2022 more than a month ago.
Valero Energy reported revenues of $41.75 billion in the last reported quarter, representing a year-over-year change of +16.3%. EPS of $8.45 for the same period compares with $2.47 a year ago.
Valero Energy is expected to post earnings of $6.90 per share for the current quarter, representing a year-over-year change of +198.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.8%.
Valero Energy has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Phillips 66 (PSX) Up 9.4% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Phillips 66 (PSX - Free Report) . Shares have added about 9.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Phillips 66 due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Phillips 66 Misses on Q4 Earnings Estimates
Phillips 66 reported fourth-quarter 2022 adjusted earnings of $4 per share, missing the Zacks Consensus Estimate of $4.34. However, the bottom line improved from $2.94 per share in the year-ago quarter.
Total quarterly revenues of $40,907 million beat the Zacks Consensus Estimate of $34,302 million. The top line also improved from the year-ago quarter’s $33,568 million.
Lower-than-expected quarterly earnings can be primarily attributed to lower contributions from the Chemicals segment. The negatives were partially offset by strong refining margins worldwide.
Segmental Results
Midstream:
The segment generated adjusted pre-tax quarterly earnings of $674 million, up from $634 million in the year-ago quarter. Higher contributions from transportation, and NGL and other aided the segment.
Chemicals:
It recorded adjusted pre-tax earnings of $52 million, down from $424 million in the prior-year quarter. Lower margins and volumes primarily hurt the segment.
Refining:
It reported adjusted pre-tax earnings of $1,626 million, up from $466 million in the year-ago quarter. The segment was backed by increased volumes and realized margins.
The segment’s realized refining margins worldwide improved to $19.73 per barrel from the year-ago quarter’s $11.95. The same in the Central Corridor and Atlantic Basin/Europe increased to $25.03 and $19.58 per barrel from the year-ago levels of $12.60 and $11, respectively.
In the Gulf Coast, the metric registered an improvement to $16.35 per barrel from $10.16 in the prior-year quarter. The West Coast witnessed an increase in margins from $15.80 per barrel in the year-ago quarter to $16.77 in the December-end quarter of 2022.
Marketing and Specialties
Pre-tax earnings increased to $539 million from $471 million in the year-ago quarter.
While realized marketing fuel margins in the United States increased to $2.05 per barrel from the year-ago quarter’s $1.87 per barrel, the same in the international markets increased to $9.94 from the year-ago level of $9.81.
Costs and Expenses
Total costs and expenses in the fourth quarter increased to $38,360 million from $31,941 million in the year-ago period.
Financial Condition
For the reported quarter, Phillips 66 generated $4,750 million of net cash from operations, up from $1,800 million a year ago. The company’s capital expenditure and investments totaled $713 million. It paid out dividends of $456 million in the reported quarter.
As of Dec 31, 2022, cash and cash equivalents were $6.1 billion. The company’s total liquidity was $12.8 billion. Total debt was $17.2 billion, reflecting a consolidated debt to capitalization of 34%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 8.16% due to these changes.
VGM Scores
Currently, Phillips 66 has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Phillips 66 has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Phillips 66 is part of the Zacks Oil and Gas - Refining and Marketing industry. Over the past month, Valero Energy (VLO - Free Report) , a stock from the same industry, has gained 2.3%. The company reported its results for the quarter ended December 2022 more than a month ago.
Valero Energy reported revenues of $41.75 billion in the last reported quarter, representing a year-over-year change of +16.3%. EPS of $8.45 for the same period compares with $2.47 a year ago.
Valero Energy is expected to post earnings of $6.90 per share for the current quarter, representing a year-over-year change of +198.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.8%.
Valero Energy has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.