Phillips 66 (PSX) Q1 Earnings Miss, Revenues Beat Estimates

Phillips 66 (NYSE:PSX) posted adjusted first-quarter 2016 earnings of $0.67 per share missing the Zacks Consensus Estimate of $0.86. The bottom line was also below the year-ago quarter figure of $1.51. Lower earnings from all its segments resulted in the decline.

Quarterly revenues of $17.8 billion were significantly lower than the year-ago quarter level of $23.4 billion. The top line, however, beat the Zacks Consensus Estimate of $16.9 billion.

Segment Results

Midstream

The segment generated adjusted quarterly earnings of $65 million compared with $67 million in the year-ago quarter. Lower contribution from the NGL business hampered the results.

Chemicals

The segment generated adjusted earnings of $156 million, down from $203 million in the comparable quarter last year. Lower polyethylene sales prices and lower margins led to the decrease.

Refining

The segment generated adjusted earnings of $86 million compared with $538 million in the prior-year quarter. Worldwide lower gasoline and distillate margins led to the decline. During the quarter, Phillips 66’s refining utilization and clean product yields were at 94% and 82%, respectively.

Marketing and Specialties (M&S)

Segmental earnings were $205 million, down from $304 million in the comparable quarter last year.

Financial Condition

In the reported quarter, Phillips 66 generated $258 million of cash from operations. It also returned capital worth $687 million to shareholders. Of this, $296 million was disbursed as dividends, while $391 million was used to repurchase 5 million shares of common stock.

As of Mar 31, 2016, cash and cash equivalents were $1.7 billion alongside $8.8 billion of debt. The company’s debt-to-capitalization ratio was 27%.

Zacks Rank

Phillips 66 currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks from the oil and gas industry include ReneSola Ltd. (NYSE:SOL) , FutureFuel Corp. (NYSE:FF) and Braskem S.A. (NYSE:BAK) . All these stocks sport a Zacks Rank #1 (Strong Buy).