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What's in Store for Phillips 66 Partners (PSXP) Q4 Earnings?

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Zacks Equity Research
·4 min read
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Phillips 66 Partners LP PSXP is set to report fourth-quarter 2020 results on Jan 29, before the opening bell.

In the last reported quarter, the partnership came up with adjusted earnings per unit of 85 cents, in line with the Zacks Consensus Estimate on the back of higher storage and processing activities, partially offset by lower throughput volumes of refined petroleum products as well as crude oil. It surpassed the Zacks Consensus Estimate thrice in the last four quarters and met on another occasion, with the average being 12%, as shown in the chart below.

Phillips 66 Partners LP Price and EPS Surprise

Phillips 66 Partners LP Price and EPS Surprise
Phillips 66 Partners LP Price and EPS Surprise

Phillips 66 Partners LP price-eps-surprise | Phillips 66 Partners LP Quote

Let’s see how things have shaped up prior to the announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate for fourth-quarter earnings of 88 cents per share has seen no upward movement but three downward revisions in the past 30 days. The figure suggests a year-over-year decrease of 17%.

Further, the Zacks Consensus Estimate for revenues is pegged at $384.5 million for the quarter, indicating a decline of 11% from the year-ago reported figure.

Factors to Note

Although the midstream infrastructure aids it to generate stable fee-based revenues under long-term contracts, volatile market conditions in the fourth quarter might have affected shipping volumes. Due to the coronavirus pandemic, demand for refined petroleum products and NGL was under pressure, which might have affected the partnership’s pipeline transportation volumes.

Markedly, the Zacks Consensus Estimate for total fourth-quarter terminal throughput volumes is pegged at 1,011 thousand barrels per day (Mbpd), indicating a decline from the year-ago figure of 1,311 Mbpd. Moreover, the same for wholly-owned pipeline volumes for the quarter is pegged at 1,640 Mbpd, signaling a decrease from 2,038 Mbpd in the year-ago period. The decline in volumes might have affected the partnership’s bottom line in the quarter.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Phillips 66 Partners this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here as you will see below.

Earnings ESP: The partnership’s Earnings ESP is 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are currently pegged at 88 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Phillips 66 Partners currently carries a Zacks Rank #3.

Energy Stocks With Favorable Combination

Here are some companies from the Energy space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

Diamondback Energy, Inc. FANG has an Earnings ESP of +2.96% and a Zacks Rank #2, currently. The company is scheduled to release quarterly earnings on Feb 22. You can see the complete list of today’s Zacks #1 Rank stocks here.

Callon Petroleum Company CPE has an Earnings ESP of +18.52% and is a Zacks #3 Ranked player. The company is scheduled to release fourth-quarter results on Feb 24. 

Continental Resources, Inc. CLR has an Earnings ESP of +51.81% and a Zacks Rank of 3. It is scheduled to report fourth-quarter results on Feb 16.

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