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

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Phillips 66 (PSX - Free Report) posted first-quarter 2019 adjusted earnings per share of 40 cents, which surpassed the Zacks Consensus Estimate of 34 cents, courtesy of contributions from pipeline transportation businesses. This was offset partially by a significant decline in crude utilization rate.

Quarterly revenues totaled $23.7 billion, down from the year-ago quarter’s $24.1 billion. The top line also missed the Zacks Consensus Estimate of $24.7 billion.

Segment Results

Midstream

The segment generated adjusted quarterly earnings of $316 million, up from $280 million in the year-ago quarter on increased contributions from pipeline transportation businesses.

Chemicals

The segment reported adjusted earnings of $227 million, down from $286 million in the year-ago quarter owing to lower margins.

Refining

The segment’s adjusted loss was $219 million against the year-ago quarter’s earnings of $110 million.  The underperformance can be attributed to unplanned downtime, maintenance work and a substantial decline in crude utilization rate. During the quarter, Phillips 66’s refining utilization was 84%.

Marketing and Specialties (M&S)

This segment’s earnings deteriorated from $222 million in the year-ago quarter to $205 million.

Financial Condition

In the reported quarter, Phillips 66 used in $478 million of cash from operations. Through dividend payments along with share repurchases, the company returned capital worth $708 million to stockholders.

As of Mar 31, 2019, cash and cash equivalents were $1,253 million along with debt of $11.3 billion. The company’s debt-to-capitalization ratio was 30%.

Zacks Rank and Key Picks

Phillips 66 currently carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space are ProPetro Holding Corp. (PUMP - Free Report) , Parsley Energy and TransCanada Corp. (TRP - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.   

The Zacks Consensus Estimate for Midland, TX-based ProPetro’s 2019 earnings is pegged at $2.42, indicating 21% growth over the year-ago reported figure. Next year’s forecast is $2.70, hinting at 11.5% growth.

The Zacks Consensus Estimate for Austin, TX-based Parsley’s 2019 earnings stands at $1.53, implying an 8.5% improvement over the prior-year reported number. Next year’s projection is $2.47, calling for 61.8% growth.

TransCanada has beaten estimates in the last four quarters, the average being 19%.

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