Refining Woes Weigh On Phillips 66 Despite Midstream And Chemicals Gains

Phillips 66 PSX shares are trading lower on Friday after it reported first-quarter FY25 results, with revenue of $31.73 billion, beating the consensus of $31.33 billion.

Midstream segment adjusted earnings declined to $683 million from $708 million in the fourth quarter of fiscal year 2024 due to a decline in volumes.

The Chemicals segment adjusted earnings stood at $113 million versus $72 million in the prior quarter, thanks to higher volumes and lower costs.

The Refining segment’s adjusted loss widened to $(937) million from $(759) million in the prior quarter, primarily due to a decline in volumes and higher costs associated with planned turnaround activity.

The company reported refining operations with 80% crude capacity utilization and 87% clean product yield.

The Marketing and Specialties segment adjusted earnings rose to $265 million from $185 million in the prior quarter on strong international business performance.

Adjusted EPS of $(0.90) missed the consensus of $(0.72).

Phillips 66 reported operating cash flow, excluding working capital impacts, of $259 million in the quarter.

As of March 31, the company reported cash and cash equivalents of $1.5 billion and $5.4 billion in committed credit facility capacity.

The company has returned $716 million to shareholders through dividends and share repurchases in the quarter.

Phillips 66 received cash proceeds of $2.0 billion from the previously disclosed sales of non-operated equity interests in Coop Mineraloel AG and Gulf Coast Express Pipeline LLC.

"Our results reflect not only a challenging macro environment, but also the impact from one of our largest-ever spring turnaround programs, managed safely, on-time and under budget. Our assets, not impacted by planned maintenance, ran well, " said Mark Lashier, chairman and CEO.

"The acquisition of EPIC NGL earlier this month, and today's announcement that we areconstructing a new gas plant in the Permian, furthers our integrated NGL wellhead-to-market strategy, providing stable cash flow in uncertain market environments, enabling us to consistently return over 50% of net operating cash flow to shareholders," he added.

On Tuesday, the company announced a $0.05 increase in its quarterly dividend per share to $1.20, payable on June 2, 2025, to shareholders of record as of May 19, 2025.

Investors can gain exposure to the stock via IShares U.S. Oil & Gas Exploration & Production ETF IEO and VanEck Oil Refiners ETF CRAK.

Price Action: PSX shares are down 1.61% at $103.00 premarket at the last check Friday.

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