Phillips 66 Tops Q2 Estimates, Expects To Deliver $10B To $12B Shareholder Distribution By End Of 2024

Phillips 66 PSX reported Q2 adjusted EPS of $3.87, beating the consensus of $3.54.

Revenue of $35.74 billion exceeded the consensus of $34.55 billion. 

Midstream segment adjusted pre-tax income stood at $626 million, vs. $678 million in Q1 2023, with restructuring costs of $22 million related to the integration of DCP Midstream.

The Chemicals segment adjusted pre-tax income was $192 million vs. $198 million in Q1, with global olefins and polyolefins utilization standing at 98%.

The Refining segment adjusted pre-tax income stood at $1.1 billion (vs. $1.6 billion in Q1) on a $14 million loss related to a sale of assets.

Marketing and Specialties segment adjusted pre-tax income rose to $644 million from $426 million, led by higher global marketing margins on strong demand.

Operating cash flow stood at $1.0 billion in the quarter.

The company returned $1.8 billion to shareholders through dividends and share repurchases in Q2.

Since July 2022, the company has returned $5.4 billion to shareholders through share repurchases and dividends, with a target of shareholder distributions of $10 billion to $12 billion by year-end 2024.

Capital expenditures and investments stood at $551 million in Q2.

As of June 30, 2023, PSX had $3.0 billion of cash and cash equivalents and committed capacity available under credit facilities worth $5.6 billion. 

The company says the business transformation is on track to deliver run-rate savings of $1 billion by end-2023. 

As of June 30, the company has achieved $750 million of run-rate savings initiatives, which includes sustaining capital efficiencies of $200 million.

M&A: In Q2, the company closed the $3.8 billion acquisition of DCP Midstream, LP. This increased total economic interest to around 87%, which is expected to generate an incremental annual adjusted EBITDA of $1 billion. 

Price Action: PSX shares are trading lower by 1.48% at $110.45 premarket on the last check Wednesday.

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