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Phillips 66 (PSX) Down 7.2% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Phillips 66 (PSX - Free Report) . Shares have lost about 7.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Phillips 66 due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Phillips 66 reported second-quarter 2024 adjusted earnings of $2.31 per share, which beat the Zacks Consensus Estimate of $2.12. However, the bottom line was lower than the year-ago quarter’s level of $3.87.
Total quarterly revenues of $38.9 billion beat the Zacks Consensus Estimate of $32 billion. The top line also improved from the year-ago quarter’s $35.7 billion.
The better-than-expected quarterly results can be primarily attributed to record natural gas liquids (NGL) volumes in the Midstream segment and refining crude utilization hitting a five-year high. This was partially offset by higher total costs and expenses.
Segmental Results
Midstream:
The segment generated adjusted pre-tax quarterly earnings of $753 million, up from $642 million in the year-ago quarter. The reported figure also surpassed our estimate of $604.6 million. The increase can be attributed to higher NGL volumes and margins, as well as lower costs.
Chemicals:
The unit recorded adjusted pre-tax earnings of $222 million, up from $192 million in the prior-year quarter. The reported figure also surpassed our estimate of $155.5 million. The rise in profits can be primarily attributed to increased margins, partially offset by turnaround costs.
Refining:
The segment reported adjusted pre-tax earnings of $302 million, down from $1.19 billion in the year-ago quarter. The reported figure also missed our projection of $744.1 million. The decrease was primarily due to lower market crack spreads, partially offset by higher volumes and lower costs.
Refining’s realized refining margins worldwide declined to $10.01 per barrel from the year-ago quarter’s $15.55, and the same in the Central Corridor and Atlantic Basin/Europe declined to $12.75 and $8.10 per barrel, respectively, from the year-ago quarter’s $22.58 and $10.64.
The West Coast’s margins declined to $13.06 per barrel from $15.80 in the year-ago quarter. In the Gulf Coast, the metric declined to $7.88 per barrel from $13.22 a year ago.
Marketing & Specialties
Pre-tax earnings declined to $415 million from $533 million in the year-ago quarter. The reported figure lagged our projection of $492.1 million.
Realized marketing fuel margins in the United States declined to $1.70 per barrel from the year-ago quarter’s $2.25, and the same in the international markets decreased to $5.87 from $6.50 a year ago.
Costs & Expenses
Total costs and expenses in the second quarter increased to $37.6 billion from $33.5 billion in the year-ago period. Our projection for the same was pinned at $30 billion.
Financial Condition
For the reported quarter, Phillips 66 generated $2.1 billion of net cash from operations, significantly higher than $955 million a year ago. The company’s capital expenditure and investments totaled $367 million. It paid out dividends of $485 million in the second quarter.
As of Jun 30, 2024, cash and cash equivalents were $2.4 billion. Total debt was $19.9 billion, reflecting a debt-to-capitalization of 43.4%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -15.4% due to these changes.
VGM Scores
Currently, Phillips 66 has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Phillips 66 has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Phillips 66 belongs to the Zacks Oil and Gas - Refining and Marketing industry. Another stock from the same industry, TotalEnergies SE Sponsored ADR (TTE - Free Report) , has gained 2.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
TotalEnergies reported revenues of $49.18 billion in the last reported quarter, representing a year-over-year change of -12.6%. EPS of $1.98 for the same period compares with $1.99 a year ago.
For the current quarter, TotalEnergies is expected to post earnings of $2.07 per share, indicating a change of -21.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -5.3% over the last 30 days.
TotalEnergies has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Phillips 66 (PSX) Down 7.2% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Phillips 66 (PSX - Free Report) . Shares have lost about 7.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Phillips 66 due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Phillips 66 Q2 Earnings Beat, Revenues Increase Y/Y
Phillips 66 reported second-quarter 2024 adjusted earnings of $2.31 per share, which beat the Zacks Consensus Estimate of $2.12. However, the bottom line was lower than the year-ago quarter’s level of $3.87.
Total quarterly revenues of $38.9 billion beat the Zacks Consensus Estimate of $32 billion. The top line also improved from the year-ago quarter’s $35.7 billion.
The better-than-expected quarterly results can be primarily attributed to record natural gas liquids (NGL) volumes in the Midstream segment and refining crude utilization hitting a five-year high. This was partially offset by higher total costs and expenses.
Segmental Results
Midstream:
The segment generated adjusted pre-tax quarterly earnings of $753 million, up from $642 million in the year-ago quarter. The reported figure also surpassed our estimate of $604.6 million. The increase can be attributed to higher NGL volumes and margins, as well as lower costs.
Chemicals:
The unit recorded adjusted pre-tax earnings of $222 million, up from $192 million in the prior-year quarter. The reported figure also surpassed our estimate of $155.5 million. The rise in profits can be primarily attributed to increased margins, partially offset by turnaround costs.
Refining:
The segment reported adjusted pre-tax earnings of $302 million, down from $1.19 billion in the year-ago quarter. The reported figure also missed our projection of $744.1 million. The decrease was primarily due to lower market crack spreads, partially offset by higher volumes and lower costs.
Refining’s realized refining margins worldwide declined to $10.01 per barrel from the year-ago quarter’s $15.55, and the same in the Central Corridor and Atlantic Basin/Europe declined to $12.75 and $8.10 per barrel, respectively, from the year-ago quarter’s $22.58 and $10.64.
The West Coast’s margins declined to $13.06 per barrel from $15.80 in the year-ago quarter. In the Gulf Coast, the metric declined to $7.88 per barrel from $13.22 a year ago.
Marketing & Specialties
Pre-tax earnings declined to $415 million from $533 million in the year-ago quarter. The reported figure lagged our projection of $492.1 million.
Realized marketing fuel margins in the United States declined to $1.70 per barrel from the year-ago quarter’s $2.25, and the same in the international markets decreased to $5.87 from $6.50 a year ago.
Costs & Expenses
Total costs and expenses in the second quarter increased to $37.6 billion from $33.5 billion in the year-ago period. Our projection for the same was pinned at $30 billion.
Financial Condition
For the reported quarter, Phillips 66 generated $2.1 billion of net cash from operations, significantly higher than $955 million a year ago. The company’s capital expenditure and investments totaled $367 million. It paid out dividends of $485 million in the second quarter.
As of Jun 30, 2024, cash and cash equivalents were $2.4 billion. Total debt was $19.9 billion, reflecting a debt-to-capitalization of 43.4%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -15.4% due to these changes.
VGM Scores
Currently, Phillips 66 has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Phillips 66 has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Phillips 66 belongs to the Zacks Oil and Gas - Refining and Marketing industry. Another stock from the same industry, TotalEnergies SE Sponsored ADR (TTE - Free Report) , has gained 2.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
TotalEnergies reported revenues of $49.18 billion in the last reported quarter, representing a year-over-year change of -12.6%. EPS of $1.98 for the same period compares with $1.99 a year ago.
For the current quarter, TotalEnergies is expected to post earnings of $2.07 per share, indicating a change of -21.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -5.3% over the last 30 days.
TotalEnergies has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.