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What's in Store for Phillips 66 This Earnings Season?
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Phillips 66 (PSX - Free Report) is set to report third-quarter 2024 earnings on Oct. 29, before the opening bell.
Let us delve into the factors that are likely to have affected this diversified energy player’s quarterly performance. However, before that, it would be worth reviewing PSX’s performance in the previous quarter.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Highlights of Q2 Earnings & Surprise History
In the last reported quarter, the company’s earnings of $2.31 per share beat the Zacks Consensus Estimate of $2.12 due to record natural gas liquids volumes in the Midstream segment and refining crude utilization hitting a five-year high. This was partially offset by higher total costs and 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 7.22%. This is depicted in the graph below:
The Zacks Consensus Estimate for third-quarter earnings per share of $1.71 has witnessed no upward and five downward movements over the past 30 days. The estimated figure suggests a decline of 63% from the year-ago reported number.
The Zacks Consensus Estimate for revenues of $32.03 billion indicates a 20.6% decrease from the year-ago reported figure.
Factors to Consider
Global refining margins remained robust in the third quarter, driven by high demand for gasoline amid tighter supplies. PSX's refining operations, a core part of its business, likely benefited from this environment, supporting stable earnings.
Despite strong refining margins, crude oil prices dropped during the quarter, especially in September. Data from the U.S. Energy Information Administration show that the average spot price for West Texas Intermediate crude at Cushing, OK, was $70.24 per barrel in September 2024, down from $89.43 in the comparable period of 2023. While lower oil prices can occasionally benefit refiners, they can also reduce revenues in other areas of PSX's diverse portfolio, particularly in its Midstream and Marketing segments.
Volatility in natural gas prices, which are a key input for refining operations, might have squeezed margins if the company faced higher energy costs without sufficient pricing power in the downstream market. Our model predicts adjusted pre-tax income from the refining business to decline almost 65% year over year in the third quarter.
The company also expects a refinery turnaround expense of $140-$160 million in the September quarter, which is 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 0.00%. 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.
MUSA is scheduled to release third-quarter earnings on Oct. 30. The Zacks Consensus Estimate for earnings is pegged at $6.64 per share, suggesting an almost 14% decrease from the prior-year reported figure.
Sunoco LP (SUN - Free Report) presently has an Earnings ESP of +13.44% and a Zacks Rank #2.
Sunoco is scheduled to release third-quarter earnings on Nov. 6. The Zacks Consensus Estimate for earnings is pegged at $1.53 per share, suggesting a 48% decrease from the prior-year reported figure.
Cheniere Energy, Inc. (LNG - Free Report) presently has an Earnings ESP of +7.93% and a Zacks Rank #3.
CheniereEnergy is scheduled to release third-quarter earnings on Oct. 31. The Zacks Consensus Estimate for earnings is pegged at $1.87 per share, suggesting a 21% decline from the prior-year reported figure.
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What's in Store for Phillips 66 This Earnings Season?
Phillips 66 (PSX - Free Report) is set to report third-quarter 2024 earnings on Oct. 29, before the opening bell.
Let us delve into the factors that are likely to have affected this diversified energy player’s quarterly performance. However, before that, it would be worth reviewing PSX’s performance in the previous quarter.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Highlights of Q2 Earnings & Surprise History
In the last reported quarter, the company’s earnings of $2.31 per share beat the Zacks Consensus Estimate of $2.12 due to record natural gas liquids volumes in the Midstream segment and refining crude utilization hitting a five-year high. This was partially offset by higher total costs and 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 7.22%. 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 third-quarter earnings per share of $1.71 has witnessed no upward and five downward movements over the past 30 days. The estimated figure suggests a decline of 63% from the year-ago reported number.
The Zacks Consensus Estimate for revenues of $32.03 billion indicates a 20.6% decrease from the year-ago reported figure.
Factors to Consider
Global refining margins remained robust in the third quarter, driven by high demand for gasoline amid tighter supplies. PSX's refining operations, a core part of its business, likely benefited from this environment, supporting stable earnings.
Despite strong refining margins, crude oil prices dropped during the quarter, especially in September. Data from the U.S. Energy Information Administration show that the average spot price for West Texas Intermediate crude at Cushing, OK, was $70.24 per barrel in September 2024, down from $89.43 in the comparable period of 2023. While lower oil prices can occasionally benefit refiners, they can also reduce revenues in other areas of PSX's diverse portfolio, particularly in its Midstream and Marketing segments.
Volatility in natural gas prices, which are a key input for refining operations, might have squeezed margins if the company faced higher energy costs without sufficient pricing power in the downstream market. Our model predicts adjusted pre-tax income from the refining business to decline almost 65% year over year in the third quarter.
The company also expects a refinery turnaround expense of $140-$160 million in the September quarter, which is 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 0.00%. 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 +0.94% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
MUSA is scheduled to release third-quarter earnings on Oct. 30. The Zacks Consensus Estimate for earnings is pegged at $6.64 per share, suggesting an almost 14% decrease from the prior-year reported figure.
Sunoco LP (SUN - Free Report) presently has an Earnings ESP of +13.44% and a Zacks Rank #2.
Sunoco is scheduled to release third-quarter earnings on Nov. 6. The Zacks Consensus Estimate for earnings is pegged at $1.53 per share, suggesting a 48% decrease from the prior-year reported figure.
Cheniere Energy, Inc. (LNG - Free Report) presently has an Earnings ESP of +7.93% and a Zacks Rank #3.
CheniereEnergy is scheduled to release third-quarter earnings on Oct. 31. The Zacks Consensus Estimate for earnings is pegged at $1.87 per share, suggesting a 21% decline from the prior-year reported figure.