Phillips 66 Beats Earnings Ests, Lags Y/Y - Analyst Blog

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Phillips 66 ( PSX ) posted adjusted fourth-quarter 2013 earnings of $1.34 per share, beating the Zacks Consensus Estimate of $1.0 by 34%. The beat came from higher refined volumes, higher throughput fees alongside higher profits from the chemicals business.

The quarterly earnings compare unfavorably with $2.04 per share earned a year ago. The decline was mainly due to lower refining margins in all regions except the Gulf Coast.

Full-year 2013 earnings came at $5.89 per share, down 29.7% from year-earlier earnings of $8.38 per share. The earnings, however, came above the Zacks Consensus Estimate of $5.64.

Segment Results

Midstream


The segment generated adjusted quarterly earnings of $121 million compared with $71 million in the comparable quarter last year. The increase was backed by improved margins resulting from higher throughput fees and volume growth.

Chemicals

The segment generated adjusted earnings of $261 million compared with $246 million in the comparable quarter last year. Higher polyethylene margins, equity earnings and ethylene volumes led to the increase. This was partially offset by higher costs and lower benzene margins.

Refining

The segment generated adjusted earnings of $450 million compared with earnings of $960 million in the year-ago quarter. The dismal results can be traced to lower realized refining margins, owing to decline in the average worldwide market crack spread. During the quarter, Phillips 66's refining utilization was at 92% and clean product yield was 84%.

Marketing and Specialties (M&S)

Segmental earnings were $73 million, down from $113 million from the comparable quarter last year. The decrease was primarily due to the sale of the U.K. power generation business in Jul 2013, and lower marketing margins. This was partially offset by reduced costs and higher volumes.

Financial Condition

In the reported quarter, Phillips 66 generated $865 million of cash from operations. It also returned $876 million of capital to shareholders. Of this, $232 million was disbursed as dividends while $644 million was used to repurchase 9.9 million shares of common stock.

As of Dec 30, 2013, cash and cash equivalents were $5.4 billion alongside $6.2 billion of debt. The company's debt-to-capitalization ratio was 22% and return on capital employed was 14%.

Zacks Rank

The stock has a Zacks Rank #2 (Buy). Investors interested in oil refiners business segment can also consider stocks like CVR Energy, Inc. ( CVI ), Alon USA Energy, Inc. ( ALJ ) and Calumet Specialty Products Partners LP ( CLMT ). While CVR Energy sports a Zacks Rank #1 (Strong Buy), Alon USA and Calumet Specialty Products carry a Zacks Rank #2.



ALON USA ENERGY (ALJ): Free Stock Analysis Report

CALUMET SPECLTY (CLMT): Free Stock Analysis Report

CVR ENERGY INC (CVI): Free Stock Analysis Report

PHILLIPS 66 (PSX): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: ALJ , CLMT , CVI , PSX

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