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Phillips 66 (PSX) Q1 Earnings Beat, Revenues Lag Estimates

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Phillips 66 (PSX - Free Report) posted adjusted first-quarter 2018 earnings of $1.04 per share that comfortably surpassed the Zacks Consensus Estimate of 91 cents. The bottom line increased from the year-ago quarter figure of 56 cents. Improved earnings from all its segments, except Refining, supported growth.
 

Phillips 66 Price, Consensus and EPS Surprise

 

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

 

Quarterly revenues of $24 billion were higher than the year-ago quarter’s level of $23.7 billion. However, the top line missed the Zacks Consensus Estimate of $29.2 billion.

Segment Results

Midstream

The segment generated adjusted quarterly earnings of $233 million compared with $112 million in the year-ago quarter. Lower operating costs and taxes contributed to growth. It was partially offset by the impact of refinery turnarounds.

Chemicals

The segment generated adjusted earnings of $232 million compared with $181 million in the prior-year quarter. The upside was mainly driven by improved margins, higher volumes and lower taxes. Further, return of Cedar Bayou facility to full time operations contributed to growth.

Refining

The segment generated adjusted earnings of $91 million compared with $259 million in the prior-year quarter. Increased expenses due to intense turnaround activity and lower volumes led to the decline. During the quarter, Phillips 66’s refining utilization and clean product yields were 89% and 83%, respectively.

Marketing and Specialties (M&S)

Segmental earnings were $184 million, up from $141 million in the prior-year quarter.

Financial Condition

In the reported quarter, Phillips 66 generated $488 million in cash from operations. It also returned capital worth $3.8 billion to shareholders. Of this, $327 million was distributed as dividends, while $3.5 billion was used to repurchase shares of common stock.

As of Mar 31, 2018, the company had cash and cash equivalents of $842 million and debt of $11.6 billion. The company’s debt-to-capitalization ratio was 32%.

Q1 Price Performance

During the January-March quarter of 2018, Phillips 66’s shares lost 5.1% compared with industry’s decline of 2.6%.



 

Zacks Rank & Key Picks

Phillips 66 currently carries a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are Nine Energy Service, Inc (NINE - Free Report) , BaytexEnergy Corp (BTE - Free Report) and EOG Resources Inc (EOG - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Nine Energy Serviceis engaged in delivering onshore completion and production services to unconventional oil and gas resource development. The company posted a positive earnings surprise of 6.25% in the preceding quarter.

Baytex Energy is a conventional oil and gas income trust focused on maintaining its production and asset base through internal property development and delivering consistent returns to its unitholders. It pulled off an average positive earnings surprise of 77.3% over the last three quarters.

Houston, TX-based EOG Resources is a major independent oil and gas exploration and production company. The company delivered an average positive earnings surprise of 40.94% over the preceding four quarters.

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