Key Highlights

  • Consensus EPS of 11.73 compares with second-quarter diluted EPS of 9.55 and adjusted EPS of 9.41.
  • Consensus revenue of USD 44.91 billion compares with second-quarter revenues of USD 51,004 million, against USD 33,323 million.
  • Refining adjusted pre-tax income was USD 3.1 billion, with a realized margin of USD 24.08 per barrel.
  • Net debt was USD 16.5 billion, and management put its year-end 2026 target below USD 16 billion.

Phillips 66 (NYSE:PSX) reports third-quarter results on Wednesday, Oct. 28, before the market opens. Consensus stands at EPS of 11.73 on revenue of USD 44.91 billion, and the company has a market capitalization of USD 115.26 billion.

Phillips 66 operates refining, midstream, chemicals, marketing and renewable fuels businesses. Second-quarter revenues were USD 51,004 million against USD 33,323 million, and net income attributable to the company was USD 3,847 million against USD 877 million.

Estimates Against Second-Quarter Earnings

The EPS estimate of 11.73 is above the second-quarter diluted EPS of 9.55, which compared with 2.15 a year earlier, and above adjusted EPS of 9.41. The estimates table does not state its EPS basis. The revenue estimate of USD 44.91 billion is below the USD 51,004 million reported.

Cost of goods sold was USD 43,664 million against USD 29,077 million. Net income including noncontrolling interests was USD 3,879 million against USD 908 million, and basic EPS was 9.59 against 2.15. The company reported adjusted earnings of USD 3.8 billion, and cash from operations was USD 7.3 billion.

What Management Guided and What It Left Open

Management guided third-quarter turnaround expense of USD 100 million to USD 120 million and corporate and other costs of USD 325 million to USD 350 million. It guided crude utilization in the mid-90s for the third quarter, after 96% in the second.

Management left open the policy risk in Renewable Fuels, saying foreign feedstock RIN generation could be cut in half after the end of next year. It targets a Midstream EBITDA run rate of USD 4.5 billion by year-end 2027.

Segment Results Behind Second-Quarter Earnings

Refining adjusted pre-tax income was USD 3.1 billion, including USD 240 million of favorable mark-to-market effects, and the realized margin was USD 24.08 per barrel against USD 10.11 in the prior quarter. Operating costs were USD 5.57 per barrel excluding turnarounds.

Midstream adjusted pre-tax income was USD 785 million, Renewable Fuels was USD 544 million, Marketing and Specialties was USD 514 million, including USD 160 million of favorable mark-to-market effects, and Chemicals was USD 404 million. NGL pipeline throughput was 943,000 barrels per day, up 13,000, and Renewable Fuels utilization was 106% at the Rodeo facility, with fractionation capacity above 1 million barrels per day.

Debt Reduction, Capital Spending and Returns

Total debt was USD 20.6 billion, USD 6.6 billion lower after repaying commercial paper and part of a term loan. Net debt repayments were USD 6.7 billion, and net debt was USD 16.5 billion.

Capital expenditures and investments were USD 726 million. Shareholder returns were USD 887 million, made up of USD 379 million in repurchases and USD 508 million in dividends. The estimates table lists a market capitalization of USD 115.26 billion.

Markers for the Release

Reported EPS against 11.73 and revenues against USD 44.91 billion are the headline comparisons. Other markers are the refining margin, turnaround expense and the net debt target.