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Phillips 66 (PSX) Q4 Earnings Miss on Lower Refining Margin

Highs and Lows Stock Data

Phillips 66PSX posted adjusted fourth-quarter 2016 earnings of 16 cents per share that missed the Zacks Consensus Estimate of 39 cents and also came in below the year-ago figure of $1.31 million. Lower refining margins due to reduced market crack spread resulted in the underperformance. The negatives were mitigated to some extent by improved midstream business.

Quarterly revenues of $23,668 million surpassed the Zacks Consensus Estimate of $21,614 million as well as the year-ago quarter figure of $22,029 million.

Segmental Results

Midstream

The segment posted quarterly loss of $1 million, substantially narrower than a loss of $77 million in the year-ago quarter.

Chemicals

The segment reported earnings of $136 million as against $212 million in the year-earlier quarter. Higher turnaround activity led to the decrease.

Refining

The segment incurred loss of $38 million, which compared unfavorably with earnings of $410 million in the prior-year quarter. Decreased realized margins owing to lower market crack spread resulted in the underperformance.

Marketing and Specialties (M&S)

This segment recorded earnings of $190 million compared with $231 million in the year-ago quarter.

Financial Condition

In the reported quarter, Phillips 66 generated $667 million of cash from operations. It also returned capital worth $558 million to shareholders.

As of Dec 31, 2016, the company had cash and cash equivalents of $2.7 billion and debt of $10.1 billion. The company's debt-to-capitalization ratio was 30%.

Price Performance

In the last three months, Phillips 66 shares underperformed the Zacks categorized Oil Refining & Marketing industry. During the aforesaid period, the company's shares gained 3.2% compared with 10% improvement for the broader industry.

Zacks Rank

Phillips 66 currently has a Zacks Rank #3 (Hold).

Some better-ranked players in the energy sector include Imperial Oil Limited IMO , Suncor Energy Inc. SU and Denbury Resources Inc. DNR . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

For 2017, Imperial Oil is anticipated to post year-over-year earnings growth of 386.6%

Suncor posted an average earnings surprise of 40.55% in the last four quarters.

Denbury surpassed the Zacks Consensus Estimate in each of the last four quarters with an average earnings surprise of 283.33%.

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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 Nasdaq, Inc.


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

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