Why the Chemicals and Midstream segments outperformed in 2Q14


Nov. 20 2020, Updated 5:28 p.m. ET

Chemical and Midstream segments outperformed in 2Q14

Phillips 66’s net income decreased ~10% to $863 million in 2Q14—from $958 million in 2Q13.

The Midstream and Chemicals segments’ share in the net income increased to 11% and 33% in 2Q14—from 8% and 17% in 2Q14 over 2Q13, respectively.

Midstream segment

Phillips 66’s (PSX) 2Q14 net income for the Midstream segment increased 20% to $108 million—from $90 million in 2Q13. Earnings were positively affected by higher volume throughput and higher natural gas liquid (or NGL) prices.

The negative factors that affected the segment’s results were lower gains on DPM’s equity issuance and higher maintenance activity. PSX has equity investments in DPM.

Chemicals segment

PSX’s 2Q14 net income for the Chemicals segment increased 79% to $324 million—from $181 million in 2Q13. Earnings were positively affected by better performance in the Olefins and Polyolefins (or O&P) business. O&P had improved chain margins.

However, there were negative factors that impacted the segment’s results. The factors include O&P’s higher maintenance costs and lower equity earnings. There were also increased operating costs in Specialties, Aromatics, and Styrenics. This was mainly due to higher maintenance activities.

Other companies in the refining sector include HollyFrontier Corp. (HFC), Tesoro Corp. (TSO), and Marathon Petroleum Corporation (MPC). All of these companies are components of the Energy Select Sector SPDR ETF (XLE).

Check out our Energy & Power sector page for more interesting articles on the industry. Learn what’s been happening lately in the sector.

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