Phillips 66: 2Q17 Earnings Beat Estimates, Refining Earnings Rose



Phillips 66’s 2Q17 estimated and actual performance

Phillips 66 (PSX) posted its 2Q17 results on August 1, 2017. Before we proceed with the earnings review, let’s quickly examine the company’s 2Q17 performance versus its estimates.

In 2Q17, Phillips 66’s revenues missed Wall Street analysts’ estimates by 1%. However, its 2Q17 adjusted EPS (earnings per share) of $1.09 surpassed estimates of $1.01. Refining margins rose YoY (year-over-year) in the second quarter. The company’s 2Q17 EPS was 16% higher than its adjusted EPS in 2Q16.

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Phillips 66’s 2Q17 earnings review

In 2Q17, Phillips 66’s adjusted net income of $569 million rose 14% YoY. The increase was led by higher adjusted Refining earnings—partially offset by lower adjusted Marketing earnings. In 2Q17, adjusted earnings from the Chemical and Midstream segments rose YoY.

Phillips 66’s Refining segment rose 53% YoY in 2Q17. It rose due to higher refining margins during the quarter. The company’s refining margins rose 18% YoY to $8.5 per barrel in 2Q17. However, Phillips 66’s adjusted income from its Marketing segment fell 5% to $218 million in 2Q17—compared to 2Q16. The company’s adjusted earnings from its Midstream and Chemical segments rose 64% and 3%, respectively, in 2Q17—compared to 2Q16.

Phillips 66’s peer Marathon Petroleum’s (MPC) 2Q17 EPS was 4% lower than its 2Q16 adjusted EPS. However, Valero Energy (VLO) posted 15% higher EPS in 2Q17—compared to 2Q16. HollyFrontier (HFC) is expected to post a sharper rise in its earnings. Its 2Q17 estimated EPS is ~67% higher than its adjusted EPS in 2Q16. In contrast, Andeavor (ANDV), formerly known as “Tesoro,” and PBF Energy (PBF) are expected to post 4% and 85% lower EPS YoY, respectively, in 2Q17.


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