Phillips 66 Earnings Beat Expectations, Announces $5 Billion Buyback Authorization

Phillips 66 PSX reported an adjusted EPS of $4.63 for the third quarter (Q3) of 2023.

This marked a 19.6% year-over-year increase but falling short of the consensus estimate of $4.76

Revenue of $40.23 billion exceeded the consensus of $38.96 billion. 

Midstream segment adjusted pre-tax income stood at $712 million, vs. $604 million in 2Q23, with restructuring costs of $22 million of integration-related restructuring costs.

The Chemicals segment adjusted pre-tax income was $104 million vs. $192 million in Q2. The decrease was due to lower margins. Global olefins and polyolefins utilization was at 99% for the quarter.

The Refining segment adjusted pre-tax income stood at $1.71 billion (vs. $1.13 billion in Q2), including a $30 million legal accrual.

Marketing and Specialties segment adjusted pre-tax income declined to $633 million from $644 million in Q2.

Phillips 66's operating cash flow stood at $2.7 billion in the quarter. As of Sept. 30, it had $3.5 billion of cash and cash equivalents and $6.3 billion of committed capacity available under credit facilities.

Also Read: Phillips 66 Likely To Report Lower Q3 Earnings; These Most Accurate Analysts Revise Forecasts Ahead Of Earnings Call

PSX returned $1.2 billion to shareholders through dividends and share repurchases.

Phillips 66 raised the shareholder distributions target to a range of $13 billion to $15 billion. 

Buyback: The board approved an additional $5 billion in share repurchase authorization, in addition to its previous authorization, which had ~$3.1 billion remaining as of Sept. 30. 

Phillips 66's business transformation aims for $1 billion in run-rate cost and capital reductions by the end of 2023, with a $1.4 billion target for 2024.

The company plans to sell non-core assets, expecting to generate over $3 billion in proceeds. In August, Phillips 66 sold its 25% stake in South Texas Gateway Terminal for $275 million, adding to the total proceeds of $370 million from asset sales through 3Q23.

Price Action: PSX shares are trading lower by 1.91% at $108 premarket on Friday.

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