Phillips 66 (PSX) Gears Up for Q1 Earnings: What's in Store?

Zacks Equity Research

April 23, 2024 at 12:26 p.m.·4 min read

Phillips 66 PSX is set to report first-quarter 2024 earnings on Apr 26, before the opening bell.

In the last reported quarter, the company’s adjusted earnings of $3.09 per share beat the Zacks Consensus Estimate of $2.37 due to decreased costs and expenses. The positives were partially offset by lower refining margins worldwide.

PSX’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the same once, delivering an average surprise of 13.5%. This is depicted in the graph below.

Phillips 66 Price and EPS Surprise

Phillips 66 price-eps-surprise | Phillips 66 Quote

Estimate Trend

The Zacks Consensus Estimate for first-quarter earnings per share of $2.16 has witnessed no upward movement and three downward revisions over the past 30 days. The estimated figure suggests a 48.7% decline from the year-ago quarter’s reported number.

The Zacks Consensus Estimate for first-quarter revenues of $31.1 billion indicates an 11.5% decline from the year-ago reported figure.

Factors to Consider

The company's midstream business, which includes pipelines and storage assets, is likely to have generated stable earnings because it is less sensitive to commodity price fluctuations. This stability is further enhanced by its integration with other company segments like refining, marketing, specialties and chemicals, allowing for more predictable cash flows despite the volatile energy market.

Then again, refining operations are more directly impacted by fluctuations in oil prices and retail gasoline prices. In the first quarter, the significant disparity between high crude oil prices and lower retail gasoline prices is likely to have hurt the company’s refining operations.

This situation, wherein the cost of raw materials (crude oil) is high while the selling price of the finished product (gasoline) is low, typically leads to decreased profitability in the refining segment. We expect adjusted pre-tax earnings from refining to have declined 32% year over year in the to-be-reported quarter.

Earnings Whispers

Our proven model does not indicate an earnings beat for PSX 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: Phillips 66’s Earnings ESP is -4.23%. This is because the Most Accurate Estimate is pegged at earnings of $2.07 per share, whereas the Zacks Consensus Estimate is pegged at earnings of $2.16. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

Stocks to Consider

Here are three firms that you may want to consider, as these have the right combination of elements to post an earnings beat this reporting cycle.

Antero Midstream Corporation AM has an Earnings ESP of +2.04% and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is scheduled to release first-quarter earnings on Apr 24. The Zacks Consensus Estimate for AM’s earnings is pegged at 25 cents per share, indicating a 19% increase from the year-ago quarter’s recorded figure.

Hess Corporation HES has an Earnings ESP of +6.41% and flaunts a Zacks Rank #1 at present.

Hess is scheduled to release first-quarter earnings on Apr 25. The Zacks Consensus Estimate for HES’s earnings is pegged at $1.75 per share, indicating a 54.9% increase from the year-ago quarter’s recorded figure.

Exxon Mobil Corporation XOM currently has an Earnings ESP of +0.13% and a Zacks Rank #3.

ExxonMobil is scheduled to release first-quarter earnings on Apr 26. The Zacks Consensus Estimate for XOM’s earnings is pegged at $2.19 per share, indicating a 22.6% decline from the year-ago quarter’s recorded figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Exxon Mobil Corporation (XOM) : Free Stock Analysis Report

Hess Corporation (HES) : Free Stock Analysis Report

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Phillips 66 (PSX) : Free Stock Analysis Report

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Phillips 66 Price and EPS Surprise

Estimate Trend

Factors to Consider

Earnings Whispers

Stocks to Consider

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