Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Phillips 66 Earnings Beat Reflects 'Strong Market Environment'

Stock Markets Jul 29, 2022 11:53AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters Phillips 66 (PSX) Earnings Beat Reflects 'Strong Market Environment'
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio

By Sam Boughedda

Despite an earlier dip, Phillips 66 (NYSE:PSX) shares are trading 1% higher Friday following its second-quarter earnings report.

The company beat earnings estimates, posting earnings per share of $6.77, $1.02 better than the analyst estimate of $5.75. In addition, cash flow from operations came in at $3.6 billion, and free cash flow was $3.2 billion.

The company said it is continuing its business transformation to enable sustainable cost reductions of at least $700 million annually across the enterprise.

During the second quarter, Phillips 66 paid down $1.5 billion of debt.

“Our earnings reflect the strong market environment during the second quarter driven by a tight global product supply and demand balance,” said Mark Lashier, President and CEO of Phillips 66. “We are focused on reliably providing critical energy products, including transportation fuels, to meet peak summer demand."

A Goldman Sachs analyst maintained a Conviction Buy rating and a $109 price target on the stock following the report.

"Phillips 66 (PSX, Buy, on CL) reported adjusted 2Q2022 EPS of $6.77. That said, after adjusting out an unrealized investment loss from the company's ownership in NOVONIX, we come to adjusted EPS of $7.15 versus GS/FactSet consensus at $6.03/$5.85, respectively. On our numbers, the EPS delta was driven mainly by strong results at Marketing and Refining," he wrote.

A Mizuho analyst maintained a Buy rating and $115 price target on Philips 66 shares, telling investors they "believe refining results will remain strong in 3Q, given the limited product supply increases and domestic product demand within the historical ranges."

"Current US refinery utilization at 90+% continues to limit the potential for meaningful supply increases in the short-term. Above mid-cycle crack spreads should continue to lead to good financial results and cash return," said the analyst. "Cash flow from operations of $3.6 billion and free cash flow of $3.2 billion (both excluding working capital change) were very strong and support a more aggressive cash return pace into 3Q (dividend increased in 2Q, we see potential acceleration of share repurchases in the current quarter)."

Finally, a BMO Capital Markets analyst said they "view Phillips 66 2Q22 earnings as positive with EPS above consensus estimates and outperformance broad based across refining, midstream, and marketing & specialties."

The analyst, who has an Outperform rating and $130 price target on Phillips 66 shares, added: "Cash flow before working capital was also strong, while WC should reverse in 2H. Phillips repaid $1.5Bn of debt, and we'll look for color around the pace of 2H buybacks on the call ($0.1Bn in 2Q)."

Phillips 66 Earnings Beat Reflects 'Strong Market Environment'

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email