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What's in Store for Phillips 66 (PSX) This Earnings Season?

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Phillips 66 (PSX - Free Report) is set to report second-quarter 2024 earnings on Jul 30, before the opening bell.

In the last reported quarter, the company’s earnings of $1.90 per share missed the Zacks Consensus Estimate of $2.05 due to lower refining margins worldwide and increased expenses. PSX’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed the same twice, delivering an average surprise of 7.3%. This is depicted in the graph below.

Phillips 66 Price and EPS Surprise

Phillips 66 Price and EPS Surprise

Phillips 66 price-eps-surprise | Phillips 66 Quote

Estimate Trend

The Zacks Consensus Estimate for second-quarter earnings per share of $3.10 has witnessed one upward and four downward movements over the past 30 days. The estimated figure suggests a decline of almost 20% from the year-ago quarter’s reported number.

The Zacks Consensus Estimate for second-quarter revenues of $32 billion indicates a 10.4% decrease year over year.

Factors to Consider

According to the U.S. Energy Information Administration, the average spot prices for West Texas Intermediate crude at Cushing, OK, were $85.35 per barrel in April, $80.02 per barrel in May and $79.77 per barrel in June. These prices were higher than those in the same months of the previous year, which were $79.45 per barrel, $71.58 per barrel, and $70.25 per barrel, respectively.

The increase in oil prices is likely to have negatively impacted the company's refining business in the June quarter of this year, as crude oil is used as a raw material for producing end products like gasoline. Our model predicts adjusted pre-tax income from the refining business to decline 35.2% year over year in the second quarter.

The company expects a refinery turnaround expense of $100 million to $120 million in the June quarter, which is also likely to have hurt profits.

Earnings Whispers

Our proven model does not indicate an earnings beat for Phillips 66 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: PSX’s Earnings ESP is -7.61%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #5 (Strong Sell).

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.

Murphy USA Inc. (MUSA - Free Report) currently has an Earnings ESP of +0.13% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

MUSA is scheduled to release second-quarter earnings on Jul 31. The Zacks Consensus Estimate for its earnings is pegged at $6.91 per share, suggesting an almost 15% increase from the prior-year reported figure.

Marathon Oil Corporation (MRO - Free Report) presently has an Earnings ESP of +0.50% and a Zacks Rank #3.

Marathon Oil is scheduled to release second-quarter earnings on Aug 7. The Zacks Consensus Estimate for its earnings is pegged at 69 cents per share, suggesting a 43.8% increase from the prior-year reported figure.

Viper Energy Inc. (VNOM - Free Report) presently has an Earnings ESP of +10.44% and a Zacks Rank #3.

Viper Energy is scheduled to release second-quarter earnings on Aug 5. The Zacks Consensus Estimate for its earnings is pegged at 43 cents per share, suggesting an 8.5% decline from the prior-year reported figure.

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

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