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Phillips 66 Posted Record Q4 Earnings, Refining Earnings Rose

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Phillips 66’s earnings

Phillips 66 (PSX) posted its fourth-quarter earnings on February 8. The company’s earnings beat analysts’ estimate. To learn more, read Surge in Refining Margins Drove Phillips 66’s Stellar Q4 Earnings.

In the fourth quarter, Phillips 66’s total adjusted pre-tax income was $2.9 billion, which rose 266% YoY. Phillips 66’s adjusted refining earnings rose from $0.5 billion in the fourth quarter of 2017 to $2.0 billion in the fourth quarter. The earnings rose due to higher refining margins. The Refining segment contributed 68% to the total adjusted income in the fourth quarter—the highest among the segments.

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The Marketing segment contributed 20% to Phillips 66’s total earnings. The marketing earnings rose 252% YoY to $592 million in the fourth quarter due to a wider fuel marketing margin. The Midstream segment and the Chemicals segment contributed 14% and 5% to the total earnings, respectively, in the fourth quarter. The midstream earnings rose due to higher transportation and NGL earnings.

Phillips 66’s refining margin

Phillips 66’s worldwide refining margin rose by $7.6 per barrel or 84% YoY to $16.5 per barrel in the fourth quarter. The refining margin rose due to higher refining margins in all of the company’s four operating regions. Wider oil spreads drove the company’s refining margin. The Central Corridor region rose by $15.4 per barrel or 102% YoY to $30.6 per barrel in the fourth quarter. The realized margins in the Gulf Coast and West Coast rose 86% YoY and 78% YoY, respectively, to $11.8 per barrel and $14.2 per barrel in the fourth quarter. The Atlantic Basin/Europe margin rose 39% YoY to $11.5 per barrel in the fourth quarter.

Peers’ refining margins

Valero Energy’s (VLO) gross refining margin rose from $8.8 per barrel in the fourth quarter of 2017 to $11.0 per barrel in the fourth quarter. Marathon Petroleum’s (MPC) gross refining and marketing margin rose by $2.0 per barrel compared to the fourth quarter of 2017 to $15.1 per barrel in the fourth quarter.

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