Phillips 66 profit blasts past estimates on refining margins boost
Reuters
Published Oct 29, 2021 07:04AM ET
Updated Oct 29, 2021 02:35PM ET
By Arunima Kumar
(Reuters) - Phillips 66 (NYSE:PSX) posted a quarterly profit that trounced market expectations on Friday, as its refining margins jumped nearly five-fold on resurging demand for motor fuels following COVID-19 vaccinations and easing restrictions.
Gasoline and distillate consumption in the United States, the world's largest fuel consumer, is back in line with five-year averages after more than a year of weak demand due to the pandemic that had also knocked refining capacity offline.
"We're probably more optimistic today that we're moving towards more of a mid-cycle earnings profile in our refining business," Chief Executive Officer Greg Garland said on a call with analysts.
Phillips 66's refining unit posted an adjusted pre-tax income of $184 million in the third quarter, compared with a loss of $970 million last year, while realized refining margins jumped 381.5% to $8.57 per barrel.
Recent storms also knocked some refining capacity offline, leading to tighter inventories.
Phillips 66 said it took a $1 billion impairment charge, primarily due to Hurricane Ida's impact on its Alliance Refinery in Louisiana, which will remain shut for the rest of the year.
That is also expected to reduce refining crude utilization to a low 80%-range in the fourth quarter from 86% in the third, the company said.
Total processed inputs rose 12.5% to 168.74 million barrels per day from a year earlier but fell 1.3% from the three months prior.
Shares of Phillips 66 were down 2.5% at $74.79 amid a broader decline in the energy sector.
Net income stood at $402 million, or 91 cents per share, for the three months ended Sept. 30, compared with a loss of $799 million, or $1.82 per share, a year earlier.
Adjusted earnings of $1.4 billion, or $3.18 per share, beat a Refinitiv IBES estimate of $1.95 per share.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.