Phillips 66 (NYSE:PSX) delivered a strong second-quarter performance, surpassing Wall Street’s earnings and revenue forecasts. The integrated energy company reported adjusted earnings of $973 million, or $2.38 per share, comfortably topping the consensus estimate of $1.69 per share.
Quarterly revenue also exceeded projections, reaching $33.52 billion against an expected $32.53 billion. GAAP earnings were $877 million, or $2.15 per share, including a $239 million pre-tax charge tied to accelerated depreciation at the Los Angeles Refinery, which is scheduled to shut down by year-end.
The company’s performance marked a sharp turnaround from the first quarter, when it posted an adjusted loss of $368 million, or $0.90 per share.
Refining utilization climbed to 98%, the highest since 2018, and clean product yield reached 86%, contributing to a record 87% yield for the year to date. Improved market crack spreads, higher volumes, and lower controllable costs drove profitability in the segment after a rough Q1.
“We delivered strong financial and operating results across our integrated value chain,” said Mark Lashier, chairman and CEO. “Refining achieved its highest utilization in seven years, and Midstream continues to grow with solid returns and increased capacity.”
Midstream adjusted pre-tax income rose from the prior quarter, fueled by increased volumes from the Coastal Bend acquisition, formerly EPIC NGL, which generated approximately $1 billion in adjusted EBITDA. Phillips 66 also brought its Dos Picos II gas processing plant in the Midland Basin online ahead of schedule and on budget.
Marketing and Specialties segment earnings improved, benefiting from higher margins and volumes, while Renewable Fuels saw gains from increased credits and stronger realized margins. The Chemicals segment posted lower income due to reduced sales prices, and Corporate and Other losses widened on higher interest expense.
The company generated $845 million in net operating cash flow and $1.9 billion excluding working capital. During the quarter, Phillips 66 returned $906 million to shareholders through dividends and share repurchases.
As of June 30, cash and cash equivalents stood at $1.1 billion, with $3.7 billion in committed credit facility capacity.
The company also announced the planned sale of a 65% stake in its Germany and Austria retail marketing business, expected to close by the end of 2025.
Refining adjusted controllable costs dropped to $5.46 per barrel in the quarter, excluding turnaround costs, the lowest since 2021.
Phillips 66 reaffirmed its commitment to capital efficiency and shareholder returns as it advances toward its 2027 strategic targets.
Price Action: At last check Friday, PSX shares were trading higher by 0.10% to $124.45.
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