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Did Phillips 66 Stock Rise after Its 2Q17 Earnings Release?

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Phillips 66’s stock performance after its 2Q17 results

Phillips 66 (PSX) announced its 2Q17 results on August 1, 2017. Phillips 66 opened at $84.1 per share—higher than its previous close of $83.8. Phillips 66 stock saw highs of $85.8 and lows of $84.0 during the day. Eventually, Phillips 66 closed at $85.6, which was ~2.2% higher than the previous day’s close. The stock likely rose because Phillips 66’s 2Q17 earnings beat analysts’ estimate.

On August 1, 2017, crude oil prices fell 2.0%. Phillips 66’s peers Marathon Petroleum (MPC), Delek US Holdings (DK), and HollyFrontier (HFC) saw their stock prices rise 1.0%, 0.5%, and 1.7%, respectively, on the day. On August 1, the SPDR Dow Jones Industrial Average ETF (DIA) and the SPDR S&P 500 ETF (SPY) rose 0.3% and 0.2%, respectively.

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2Q17 update

Phillips 66’s capex was $458 million in 2Q17. Its petrochemical project in the US Gulf Coast achieved mechanical completion in June 2017. The Bakken Pipeline, where Phillips 66 holds a 25% stake, became operational in 2Q17.

Phillips 66 added 1.2 MMbbls (million barrels) of storage capacity to the Beaumont Terminal in 2Q17. The terminal’s storage capacity was 9 MMbbls before the latest addition. Phillips 66 plans to add another 2.2 MMbbls of capacity to the terminal in 2H18.

The company is undertaking a series of modernization projects in its Refining segment. The new vacuum distillation unit at the Billings refinery, which increased Phillips 66’s capacity to process heavy crude oil, was operational during the quarter. The projects that are modernizing fluid catalytic units at Bayway and Wood River are expected to be completed in 1H18.

A word from management

In its 2Q17 press release, Phillips 66’s chairman and CEO, Greg Garland, said, “We delivered good operating performance, generated strong cash flow and made significant progress in several growth initiatives during the quarter. The Bakken Pipeline and new storage capacity at the Beaumont Terminal were placed into service, and CPChem reached mechanical completion of two polyethylene units as part of its U.S. Gulf Coast Petrochemicals Project. Additionally, the Billings Refinery completed an advantaged crude project to enhance returns. The completion of these projects improves our future earnings and cash generation capability.”

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