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Phillips 66 (PSX) Q3 Earnings Beat, Revenues Miss Estimates

Zacks Equity Research

Phillips 66 PSX posted third-quarter 2019 adjusted earnings per share of $3.11, which surpassed the Zacks Consensus Estimate of $2.60. The bottom line also increased from the year-ago $3.10, courtesy of contributions from transportation and NGL businesses.

Quarterly revenues totaled $27.8 billion, down from the year-ago quarter’s $30.6 billion. The top line also missed the Zacks Consensus Estimate of $28.3 billion owing to soft refining margin.

Segment Results

Midstream

The segment generated adjusted pre-tax quarterly earnings of $440 million, up from $312 million in the year-ago quarter on increased contributions from transportation and NGL businesses.

Chemicals

The segment reported adjusted pre-tax earnings of $269 million, up from $263 million in the prior-year quarter.

Refining

The segment’s adjusted pre-tax profit of $839 million declined from the year-ago quarter’s $1,263 million.  The underperformance can be attributed to higher costs related to turnaround activities and soft margins.

Marketing and Specialties (M&S)

This segment’s pre-tax earnings improved from $385 million in the year-ago quarter to $498 million.

Financial Condition

In the reported quarter, Phillips 66 generated $1,662 million of cash from operations. Through dividend payouts and share repurchases, the company returned capital worth $841 million to stockholders.

As of Sep 30, 2019, cash and cash equivalents were $2,268 million along with debt of $11.9 billion. The company’s debt-to-capitalization ratio was 31%.

Zacks Rank & Stocks to Consider

Phillips 66 currently carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space are Crescent Point Energy Corp. CPG, Matrix Service Company MTRX and Pembina Pipeline Corporation PBA. All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.     

Crescent beat the Zacks Consensus Estimate in three of the prior four quarters, the average positive earnings surprise being 235.1%.

Matrix Service has managed to beat the Zacks Consensus Estimate for earnings in three of the past four quarters.

Pembina Pipeline has an average positive earnings surprise of 28.1% for the past four quarters.

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