As widely expected, the second-quarter profit of Phillips 66 (NYSE: PSX) came in significantly lower than the year-ago period, but one of the biggest U.S. refiners beat analyst estimates as high capacity utilization and strong midstream and chemicals earnings partially offset weaker refining margins.
Phillips 66 reported on Tuesday adjusted earnings of $984 million for the second quarter, down from $1.77 billion for the same period of 2023.
Adjusted earnings per share fell to $2.31 in Q2 2024 from $3.87 EPS for the second quarter last year.
Despite the drop in earnings, the EPS beat the analyst consensus estimate of $1.98 compiled by The Wall Street Journal.
The earnings beat sent Phillips 66 shares rising by more than 2% in pre-market trade on Tuesday.
Crude capacity utilization jumped to 98% in the second quarter from 92% in the first quarter of the year.
Phillips 66’s realized refining margins fell to $10.01 per barrel in the second quarter from $11.01 a barrel in the first quarter, and down from $15.32 per barrel margin in the second quarter of 2023.
Higher earnings in the midstream and chemicals divisions partly offset the weaker refining business with the lower margins.
Record NGL volumes and synergy capture driving lower costs boosted the earnings of the midstream segment. Adjusted pre-tax income in the chemicals division increased compared with the first quarter, mainly due to higher margins, partially offset by turnaround costs, Phillips 66 said.
The lower earnings in the past quarter compared to the same period of 2023 were widely expected for all U.S. refiners as weaker refining margins and lackluster fuel demand in the spring and early summer were expected to be a drag on profits.
Last week, Valero reported a net income for the second quarter of 2024 that was halved compared to the same period last year.
By Charles Kennedy for Oilprice.com
Lead image (Credit: Reuters)
