Archive photo: An oil refinery in Trzebinia, Poland, not a Phillips 66 facility. Jakub Pabis/Pexels (cropped)
Phillips 66 reported $5.6 billion in third-quarter earnings Wednesday, up from $3.8 billion in the previous quarter, as stronger refining margins and higher volumes lifted the energy company’s results.
The Houston-based company said its refineries operated at 98% of crude capacity, compared with 96% in the second quarter, according to its earnings release.
Refining drives the profit increase
GAAP earnings were $5.616 billion, or $14.08 per diluted share, compared with $3.847 billion, or $9.55 per share, in the second quarter. Adjusted earnings, a non-GAAP measure, were $5.619 billion, or $14.08 per share, compared with $3.788 billion, or $9.41 per share.
The company’s realized refining margin, another non-GAAP measure, increased to $38 per barrel from $24.08 in the prior quarter. Phillips 66 attributed the increase mainly to stronger market crack spreads, the difference between crude-oil and refined-product prices.
Refining adjusted pre-tax income rose to $6.060 billion from $3.086 billion in the second quarter. The company reported record Central Corridor processed inputs of 848,000 barrels a day and a third-quarter record distillate yield of 41%.
The gains were not uniform across its businesses. Phillips 66 said midstream pre-tax income fell from the second quarter because of lower gas-transportation margins. Chemicals earnings were held back mainly by lower polyethylene margins, while marketing and renewable-fuels earnings also declined.
Debt falls as shareholder payouts rise
Phillips 66 returned approximately $2.8 billion to shareholders during the quarter, including $2.273 billion in share repurchases and $504 million in dividends.
Total debt fell by about $2 billion to $18.5 billion. The company ended September with $5.8 billion in cash and cash equivalents and $6.4 billion of committed borrowing capacity available under credit facilities.
Cash flow from operations was $7.281 billion, compared with $7.259 billion in the second quarter. Capital expenditures and investments totaled $680 million.
Pipeline investment moves forward
Phillips 66 reached a final investment decision on the proposed Western Gateway Pipeline system, with an expected in-service date in 2029. That is an investment milestone, not the start of pipeline operations.
The company also said the Coastal Bend expansion is expected to begin handling initial volumes in the fourth quarter of 2026, before reaching its full 350,000-barrel-a-day ramp-up in early 2027.
Management is scheduled to discuss the results and strategic initiatives in a webcast at noon Eastern.
JBizNews Desk | Houston
© JBizNews.com. All rights reserved. Unauthorized reproduction or redistribution is strictly prohibited.
