Phillips 66 (PSX) Beats Q2 Earnings And Revenue Estimates

Phillips 66 (NYSE:PSX) posted adjusted second-quarter 2016 earnings of 94 cents per share that beat the Zacks Consensus Estimate of 91 cents. The bottom line, however, was below the year-ago quarter level of $1.83 per share.

Quarterly revenues of $22.3 billion were significantly lower than the year-ago quarter level of $29.1 billion. Lower contribution from all segments, except the Marketing and Specialties segment, hampered the revenues. The top line, however, surpassed the Zacks Consensus Estimate of $21.3 billion.

Segment Results

Midstream

The segment generated adjusted quarterly earnings of $39 million compared with $48 million in the year-ago quarter. Lower contribution from the NGL business hampered income.

Chemicals

The segment generated adjusted earnings of $190 million as against $295 million in the comparable quarter last year. Higher planned maintenance costs and lower margins led to the decrease.

Refining

The segment’s adjusted earnings of $149 million decreased significantly from $604 million in the prior-year quarter. During the quarter, Phillips 66’s refining utilization was 100% and clean product yield was at 84%.

Marketing and Specialties (M&S)

This segment recorded earnings of $229 million, up from $182 million reported in the comparable quarter last year.

Financial Condition

In the reported quarter, Phillips 66 generated $1.2 billion of cash from operations. It also returned capital worth $571 million to shareholders. Of this, $329 million was disbursed as dividends, while $242 million was used to repurchase 3 million shares of common stock.

As of Jun 30, 2016, cash and cash equivalents were $2.2 billion alongside $8.9 billion of debt. The company’s debt-to-capitalization ratio was 27%.

Zacks Rank and Stocks to Consider

Phillips 66 currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked players from the energy sector are Sasol Ltd. (NYSE:SSL) , Dril-Quip, Inc. (NYSE:DRQ) and QEP Resources, Inc. (NYSE:QEP) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).