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Phillips 66 (PSX) Q4 Earnings and Revenues Beat Estimates

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Phillips 66 (PSX - Free Report) posted fourth-quarter 2019 adjusted earnings per share of $1.54, beating the Zacks Consensus Estimate of $1.53, courtesy of contributions from chemical business. However, the bottom line plunged 68.4% from the year-ago figure of $4.87 due to soft refining margins.

Quarterly revenues totaled $29.6 billion, slightly down from the year-ago quarter’s $29.8 billion. However, the top line surpassed the Zacks Consensus Estimate of $27.3 billion.

Segmental Results

Midstream

The segment generated adjusted pre-tax quarterly earnings of $405 million, down from $409 million in the year-ago quarter.

Chemicals

Adjusted pre-tax earnings of $173 million were up from $152 million in the prior-year quarter.

Refining

Adjusted pre-tax profit of $345 million tanked from the year-ago quarter’s $2,008 million.  This underperformance can be attributed to higher costs pertaining to turnaround activities and weak margins.

The segment’s realized refining margins worldwide fell to $9.50 per barrel from the year-ago quarter’s $16.53 per barrel.

Marketing and Specialties (M&S)

Pre-tax earnings plunged from $592 million in the year-ago quarter to $287 million.

Realized marketing fuel margins both for the United States and International markets contracted to $1.51 per barrel and $3.35 per barrel, respectively, from the year-ago quarter’s $1.95 per barrel and $11.99 per barrel each.

Phillips 66 Price, Consensus and EPS Surprise

Phillips 66 Price, Consensus and EPS Surprise

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

Financial Condition

In the reported quarter, Phillips 66 generated $1.7 billion of cash from operations. The company returned capital worth $810 million to its stockholders through dividend payouts and share repurchases.

As of Dec 31, 2019, cash and cash equivalents were $1.6 billion along with debt of $11.8 billion. The company’s debt-to-capitalization ratio was 30%.

Zacks Rank & Key Picks

Phillips 66 carries a Zacks Rank #3 (Hold). Better-ranked players in the energy space include RGC Resources Inc. (RGCO - Free Report) , Equinor ASA (EQNR - Free Report) and TC Energy Corporation (TRP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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