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Phillips 66 (PSX) to Report Q1 Earnings: Is a Beat in Store?

Zacks Equity Research
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Phillips 66 PSX is expected to report first-quarter 2018 results on Apr 27, before the market opens.

The leading refining player has an impressive earnings surprise history. Phillips 66 beat the Zacks Consensus Estimate in all of the trailing four quarters, the average positive earnings surprise being 450.1%.
 

Phillips 66 Price and EPS Surprise

 

Phillips 66 Price and EPS Surprise | Phillips 66 Quote

Let’s see how things are shaping up for this announcement.    

Which Way are Estimates Treading?

Let’s look at the estimate revisions to get a clear picture of what analysts are thinking about the company before earnings release.

The Zacks Consensus Estimate of 88 cents for the first quarter has seen no revisions by firms in the last seven days. It reflects year-over-year growth of 57.1%.

Further, analysts polled by Zacks expect revenues of $28,975 million for the impending quarter, up 22.2% from the year-ago quarter.

Factors Likely to Influence Q1 Earnings

Phillips 66 is the leading player in each of its operations like refining, chemicals and midstream in terms of size, efficiency and strengths. The company is on track to enhance its potential in every business segment by streamlining its portfolio of assets and investing in growth developments.

However, since 2012, there has been considerable rise in long-term debt with little sign of decline, reflecting Phillips 66’s weak balance sheet.

Q1 Price Performance

During the quarter, Phillips 66’s shares have underperformed the industry. The company’s shares have lost 5.1% compared with the industry’s 2.6% decline.



 

 Earnings Whisper

Our proven model show that Phillips 66 will is likely to beat estimates this quarter. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.

Zacks ESP: Phillips 66’s Earnings ESP is +2.86%. This is because the Most Accurate estimate is 90 cents, while the Zacks Consensus Estimate is pegged at 88 cents. A favorable ESP serves as a meaningful and leading indicator of a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.      
Zacks Rank: Phillips 66 has a Zacks Rank #3.

Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
 
Other Stocks Poised to Beat Estimates

Here are a few other firms that you may want to consider on the basis of our model. These have the right combination of elements to beat earnings this quarter.

Solaris Oilfield Infrastructure, Inc. SOI manufactures as well as provides patented mobile proppant management systems which unload, store and deliver proppant at oil and natural gas well sites. The company has an Earnings ESP of +6.28% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Continental Resources, Inc CLR is an independent oil and natural gas exploration and production company. The company has an Earnings ESP of +10.56% and carries a Zacks Rank #3.

Houston, TX-based EOG Resources, Inc EOG is a major independent oil and gas exploration and production company. The company has an Earnings ESP of +10.94% and a Zacks Rank #3.

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