Market Overview

Phillips 66 Reports Third-Quarter Earnings of $712 Million or $1.58 Per Share

Share:

Adjusted earnings of $1.4 billion or $3.11 per share

Highlights

  • Generated $1.7 billion of operating cash flow
  • Returned $841 million to shareholders through dividends and share repurchases
  • Initiated line fill on Gray Oak Pipeline; progressing Red Oak and Liberty pipelines
  • Started up Lake Charles isomerization unit
  • Operated at 97% utilization in Refining
  • Delivered 97% O&P utilization in Chemicals
  • Announced new $3 billion share repurchase program

Phillips 66 (NYSE:PSX), a diversified energy manufacturing and logistics company, announces third-quarter 2019 earnings of $712 million, compared with $1.4 billion in the second quarter of 2019. Excluding special items of $690 million in the third quarter, primarily impairments related to the company's investment in DCP Midstream, LLC, adjusted earnings were $1.4 billion, compared with second-quarter adjusted earnings of $1.4 billion.

"We continued to successfully execute our strategy and delivered another quarter of solid financial results," said Greg Garland, chairman and CEO of Phillips 66. "We operated safely and reliably and captured favorable margins in our Refining and Marketing businesses. Midstream's transportation and NGL businesses reported record pre-tax income, while we continued to progress Midstream's portfolio of growth projects. The Lake Charles isomerization unit reached full production, and line fill started on the Gray Oak Pipeline. CPChem operated well and contributed to our strong operating cash flow."

"During the quarter, we returned $841 million to shareholders through dividends and share repurchases. As part of our ongoing commitment to return capital to our shareholders, we announced a new $3 billion share repurchase program. Since 2012, we have returned approximately $25 billion to shareholders through dividends and share repurchases and exchanges and have reduced our initial shares outstanding by one-third."

"We look forward to providing an update on our strategy and how we are positioned to deliver superior returns to shareholders at our upcoming investor day in New York on Nov. 6."

Midstream

 

Millions of Dollars

 

Pre-Tax Income (Loss)

 

Adjusted Pre-Tax Income

 

Q3 2019

Q2 2019

 

Q3 2019

Q2 2019

Transportation

$

248

 

245

 

 

248

 

245

 

NGL and Other

169

 

143

 

 

169

 

143

 

DCP Midstream

(877

)

35

 

 

23

 

35

 

Midstream

$

(460

)

423

 

 

440

 

423

 

Midstream had a third-quarter pre-tax loss of $460 million, compared with pre-tax income of $423 million in the second quarter of 2019. Midstream results in the third quarter included $900 million of impairments related to Phillips 66's equity investment in DCP Midstream, LLC (DCP Midstream).

Transportation third-quarter adjusted pre-tax income of $248 million was $3 million higher than the second quarter, primarily due to higher pipeline volumes.

NGL and Other adjusted pre-tax income for the third quarter was $169 million, a $26 million increase from the second quarter. The improvement was mainly due to butane and propane trading activity.

The company's equity investment in DCP Midstream generated adjusted pre-tax income of $23 million in the third quarter, compared with $35 million in the second quarter. The decrease primarily reflects lower hedging results.

Chemicals

 

Millions of Dollars

 

Pre-Tax Income

 

Adjusted Pre-Tax Income

 

Q3 2019

Q2 2019

 

Q3 2019

Q2 2019

Olefins and Polyolefins

$

209

 

260

 

 

251

 

260

 

Specialties, Aromatics and Styrenics

36

 

34

 

 

36

 

34

 

Other

(18

)

(19

)

 

(18

)

(19

)

Chemicals

$

227

 

275

 

 

269

 

275

 

The Chemicals segment reflects Phillips 66's equity investment in Chevron Phillips Chemical Company LLC (CPChem). Chemicals' third-quarter pre-tax income was $227 million, compared with $275 million in the second quarter. Chemicals results in the third quarter included a $42 million reduction to equity earnings from a lower-of-cost-or-market inventory adjustment.

CPChem's Olefins and Polyolefins (O&P) business contributed $251 million of adjusted pre-tax income in the third quarter of 2019, compared with $260 million in the second quarter. The $9 million decrease mainly reflects lower margins, partially offset by higher sales volumes. Global O&P utilization was 97% in the third quarter.

CPChem's Specialties, Aromatics and Styrenics (SA&S) business contributed third-quarter 2019 adjusted pre-tax income of $36 million, in line with the prior quarter.

Refining

 

Millions of Dollars

 

Pre-Tax Income

 

Adjusted Pre-Tax Income

 

Q3 2019

Q2 2019

 

Q3 2019

Q2 2019

Refining

$

View Comments and Join the Discussion!