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Phillips 66 (PSX) Q1 Earnings Beat Estimates, Revenues Fall Y/Y

Phillips 66 PSX reported first-quarter 2023 adjusted earnings of $4.21 per share, beating the Zacks Consensus Estimate of $3.58. The bottom line improved from $1.32 per share in the year-ago quarter.

Total quarterly revenues of $35,089 million beat the Zacks Consensus Estimate of $29,756 million. However, the top line declined from the year-ago quarter’s $36,722 million.

Strong quarterly earnings can be primarily attributed to strong refining margins worldwide.

Phillips 66 Price, Consensus and EPS Surprise

 

Phillips 66 Price, Consensus and EPS Surprise
Phillips 66 Price, Consensus and EPS Surprise

Phillips 66 price-consensus-eps-surprise-chart | Phillips 66 Quote

Segmental Results

Midstream:

The segment generated adjusted pre-tax quarterly earnings of $678 million, up from $212 million in the year-ago quarter. Higher contributions from NGL and other aided the segment.

Chemicals:

The unit recorded adjusted pre-tax earnings of $198 million, down from $396 million in the prior-year quarter. Lower margins and volumes primarily hurt the segment.

Refining:

The segment reported adjusted pre-tax earnings of $1,608 million, up from $190 million in the year-ago quarter. It was backed by increased volumes and realized margins.

The segment’s realized refining margins worldwide improved to $20.72 per barrel from the year-ago quarter’s $10.83. The same in the Central Corridor and Atlantic Basin/Europe increased to $26.86 and $16.13 per barrel from the year-ago levels of $7.89 and $11.71, respectively.

In the Gulf Coast, the metric improved to $21.28 per barrel from $8.59 in the prior-year quarter. However, the West Coast witnessed a decline in margins from $17.74 per barrel in the year-ago quarter to $16.53 in the March-end quarter of 2023.

Marketing and Specialties

Pre-tax earnings increased to $426 million from $296 million in the year-ago quarter.

While realized marketing fuel margins in the United States increased to $2.30 per barrel from the year-ago quarter’s $1.59 per barrel, the same in the international markets increased to $6.45 from the year-ago level of $2.30.

Costs and Expenses

Total costs and expenses in the first quarter declined to $32,438 million from $35,894 million in the year-ago period.

Financial Condition

For the reported quarter, Phillips 66 generated $1,199 million of net cash from operations, up from $1,136 million a year ago. The company’s capital expenditure and investments totaled $378 million. It paid out dividends of $486 million in the reported quarter.

As of Mar 31, 2023, cash and cash equivalents were $7 billion. Total debt was $18.5 billion, reflecting a consolidated debt to capitalization of 35%.

Zacks Rank & Stocks to Consider

Phillips 66 currently carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Dril-Quip Inc. DRQ is scheduled to release first-quarter results on May 8. DRQ’s balance sheet is free of debt load, which highlights a sound financial position.

Dril-Quip has witnessed upward estimate revision for 2023 earnings in the past 60 days. The Zacks Consensus Estimate for DRQ’s earnings is pegged at a loss of 2 cents per share, suggesting an increase from the prior-year reported figure.

Cactus Inc. WHD is scheduled to release first-quarter results on May 9. Compared with composite stocks belonging to the industry, Cactus has significantly lower exposure to debt capital.

Cactus has witnessed upward estimate revisions for 2023 earnings in the past 30 days. The Zacks Consensus Estimate for WHD’s earnings is pegged at 56 cents per share, suggesting an increase from the prior-year reported figure.

Smart Sand, Inc. SND is scheduled to release first-quarter results on May 9. For 2023, the company has a projected earnings growth rate of 1,450%.

Smart Sand has witnessed an upward estimate revision for 2023 earnings in the past 60 days. SND beat the Zacks Consensus Estimate for earnings in the trailing four quarters, delivering a surprise of 147.3%, on average.

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