How Did Phillips 66’s Marketing Segment Perform in 3Q16?



Phillips 66’s marketing segment

Phillips 66’s (PSX) adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) from its Marketing segment fell 22% from 3Q15 to $429 million in 3Q16 due to weaker marketing margins coupled with lower volumes of fuel sold.

In 3Q16, volumes fell 1% from 3Q15 to 2,233 thousand barrels per day. PSX’s marketing margin fell YoY (year-over-year) in the US as well as in international regions 17% and 13%, respectively, to $1.8 per barrel and $5.2 per barrel, respectively, in 3Q16.

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Peers’ marketing segments

In 3Q16, Marathon Petroleum (MPC) saw a 14% fall in its marketing segment’s income from operations to $209 million. This was due to lower margins on the sale of gasoline and distillates, partially offset by a rise in sales volumes of these products.

Notably, for exposure to refining stocks, investors can consider the iShares North American Natural Resources ETF (IGE). The ETF has ~7% exposure to refining and marketing sector stocks.


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