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Phillips 66 (PSX) Q2 Earnings Beat Estimates, Revenues Lag

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Phillips 66 (PSX - Free Report) posted second-quarter 2017 adjusted earnings of $1.09 per share which surpassed the Zacks Consensus Estimate of $1.02. The bottom line also increased from the year-ago quarter level of 94 cents. The growth came on the back of higher contribution from all segments, except the Marketing and Specialties segment.

Quarterly revenues of $24.6 billion were higher than the year-ago quarter level of $22.3 billion. However, the top line lagged the Zacks Consensus Estimate of $25.14 billion.
 

Phillips 66 Price, Consensus and EPS Surprise

 

Phillips 66 Price, Consensus and EPS Surprise | Phillips 66 Quote

Segment Results

Midstream

The segment generated adjusted quarterly earnings of $59 million compared with $39 million in the year-ago quarter. Gain from the sale of a non-core gathering system led to increased income.

Chemicals

The segment generated adjusted earnings of $196 million compared with $190 million in the comparable quarter last year. Higher volumes and improved margins led to the increase.

Refining

The segment’s adjusted earnings of $224 million increased from $149 million in the prior-year quarter. During the quarter, Phillips 66’s refining utilization was 98% and clean product yield was at 85%.

Marketing and Specialties (M&S)

This segment recorded earnings of $214 million, down from $229 million reported in the comparable quarter last year.

Financial Condition

In the reported quarter, Phillips 66 generated $1.9 billion of cash from operations. It also returned capital worth $741 million to shareholders. Of this, $360 million was disbursed as dividends, while $381 million was utilized to repurchase common stock.

As of Jun 30, cash and cash equivalents were $2.2 billion alongside $10 billion of debt. The company’s debt-to-capitalization ratio was 30%.

Zacks Rank and Stocks to Consider

Currently, Phillips 66 carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the same space include Enbridge Energy, LP (EEP - Free Report) , Braskem S.A. (BAK - Free Report) and TransCanada Corp (TRP - Free Report) . While Braskem and TransCanada sport a Zacks Rank #1 (Strong Buy), Enbridge Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Enbridge Energy delivered a positive earnings surprise of 128.57% in the preceding quarter. The company beat estimates in three of the trailing four quarters with an average positive earnings surprise of 38.22%.

Braskem delivered a positive earnings surprise of 107.79% in the quarter ending September 2016.

TransCanada delivered a negative earnings surprise of 7.58% in the preceding quarter. It surpassed estimates in two of the trailing four quarters with an average positive earnings surprise of 1.06%.


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