Phillips 66 (PSX Quick QuotePSX - Free Report) reported fourth-quarter 2024 adjusted loss of 15 cents per share, narrower than the Zacks Consensus Estimate of a loss of 20 cents. The bottom line declined from the year-ago quarter’s earnings of $3.09.

Total quarterly revenues of $34 billion beat the Zacks Consensus Estimate of $32 billion. However, the top line declined from the year-ago level of $38.7 billion.

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The better-than-expected quarterly results can be primarily attributed to higher renewable fuel margins and a reduction in total costs and expenses. However, the positives were partially offset by lower contributions from the Refining segment due to a decline in realized margins.

Segmental Results

Midstream:

The segment generated adjusted pre-tax quarterly earnings of $708 million, down from $757 million in the year-ago quarter. The reported figure surpassed our estimate of $69.8 million. The decline can be attributed to decreased Terminals transportation volumes compared to the prior-year quarter’s level.

Chemicals:

The unit recorded adjusted pre-tax earnings of $72 million, down from $106 million in the prior-year quarter. The reported figure also surpassed our estimate of $37.8 million. The decrease in profits can be primarily attributed to lower margins and higher maintenance and turnaround costs.

Refining:

The segment reported an adjusted pre-tax loss of $759 million against adjusted pre-tax earnings of $842 million in the year-ago quarter. The reported figure also missed our projection of earnings of $26.7 million. The deterioration was primarily due to a decline in realized margins, caused by lower market crack spreads and accelerated depreciation associated with the shutdown of its Los Angeles Refinery.

Refining’s realized refining margins worldwide declined to $6.08 per barrel from the year-ago quarter’s $13.88, and the same in the Central Corridor and Atlantic Basin/Europe dropped to $6.68 and $6.09 per barrel, respectively, from the year-ago quarter’s $21.72 and $9.11.

The West Coast’s margins declined to $5.74 per barrel from $11.03 in the year-ago quarter. In the Gulf Coast, the metric declined to $5.58 per barrel from $13.72 a year ago.

Marketing & Specialties

Pre-tax earnings declined to $185 million from $396 million in the year-ago quarter. The reported figure missed our projection of $234.3 million.

Realized marketing fuel margins in the United States declined to $1.18 per barrel from the year-ago quarter’s $1.45, and the same in the international markets declined to $3.70 from $6.80 a year ago.

Renewable Fuels

The segment reported adjusted pre-tax earnings of $28 million against an adjusted pre-tax loss of $11 million in the year-ago quarter. The reported figure beat our projection of a loss of $14.8 million. This was primarily due to higher margins at the Rodeo Complex in California. The segment was further aided by strong international results.

Costs & Expenses

Total costs and expenses in the fourth quarter decreased to $34 billion from $37 billion in the year-ago period. Our projection for the same was pinned at $34.5 billion.

Financial Condition

Phillips 66 generated $1.2 billion of net cash from operations for the reported quarter, significantly lower than $2.19 billion a year ago. The company’s capital expenditure and investments totaled $506 million. It paid out dividends of $472 million in the fourth quarter.

As of Dec. 31, 2024, cash and cash equivalents were $1.74 billion. Total debt was $20.1 billion, reflecting a debt-to-capitalization of 41%.

PSX’s Zacks Rank and Key Picks

PSX currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the energy sector are Sunoco LP SUN, Equinor ASA EQNR and Cheniere Energy, Inc. LNG. Sunoco and Equinor currently sport a Zacks Rank #1 (Strong Buy) each, while Cheniere Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sunoco LP is one of the largest distributors of motor fuel in the United States. The partnership distributes fuel to independent dealers, commercial customers, convenience stores and distributors. Its current distribution yield is greater than that of the industry's composite stocks, providing unitholders with consistent returns.

Equinor ASA is one of the leading integrated energy companies globally and the second-largest supplier of natural gas in Europe. The company’s expansion in the renewable energy space positions it for long-term growth as more and more countries transition toward cleaner energy solutions to meet their climate goals. Its strategic pivot toward low-carbon energy solutions unlocks new revenue streams in the growing market for clean energy and carbon management solutions.

Cheniere Energy is involved in LNG-related businesses, which include LNG terminals and natural gas marketing. The company has achieved a milestone with the first production from the first LNG train of its Corpus Christi Stage 3 Liquefaction Project. The project, which includes seven midscale LNG trains, aims to expand the production capacity of the Corpus Christi Liquefaction facility. This expansion is expected to enhance Cheniere's position in the rapidly growing global LNG market, enabling it to meet the rising demand for LNG, both in the United States and internationally.