Integrated downstream firm Phillips 66 posted first-quarter earnings of $748 million, compared with earnings of $1.3 billion in the previous quarter and $1.96 billion in the same quarter in 2023.
Excluding special items of $74 million, the company had adjusted earnings of $822 million in the first quarter, compared to fourth-quarter adjusted earnings of $1.36 billion, the company said in a recent earnings release.
Phillips 66’s adjusted earnings per share (EPS) for the quarter was $1.90, compared to adjusted EPS of $4.21 in the first quarter last year. The Zacks Consensus Estimate was $2.05 per share.
“In the first quarter, we progressed our strategic priorities and returned $1.6 billion to shareholders,” Phillips 66 President and CEO Mark Lashier said in a statement. “While our crude utilization rates were strong, our results were affected by maintenance that limited our ability to make higher-value products. We were also impacted by the renewable fuels conversion at Rodeo, as well as the effect of rising commodity prices on our inventory hedge positions. The maintenance is behind us, our assets are currently running near historical highs and we are ready to meet peak summer demand”.
The company’s midstream first-quarter pre-tax income was $554 million, compared with $756 million in the fourth quarter of 2023. The results in the first quarter included a $59 million asset impairment, while the fourth-quarter results included a $2 million tax benefit, it noted.
For its Refining segment, first-quarter reported pre-tax income was $131 million, compared with pre-tax income of $814 million in the fourth quarter of 2023. The results in the first quarter included a $104 million asset impairment and a $7 million benefit related to a legal settlement, while the fourth-quarter results included a $17 million tax benefit, Phillips 66 said.
The company said it continues to invest in high-return, low-capital projects to improve asset reliability and market capture. Since 2022, completed projects have added over three percent to market capture based on mid-cycle pricing, it noted.
“We recently launched a process to sell our retail marketing business in Germany and Austria, consistent with our plan to divest non-core assets. A major milestone was achieved with the startup of our Rodeo Renewable Energy Complex, positioning Phillips 66 as a world leader in renewable fuels,” Lashier said.
Phillips 66 said it plans to monetize assets “that no longer fit its long-term strategy”. The company is progressing with the potential divestiture of its retail marketing business in Germany and Austria, with the completion subject to market and other conditions, including customary approvals, it said.
Phillips 66 in the first quarter started up its Rodeo Renewed project in San Francisco, California. The Rodeo Renewable Energy Complex is now producing 30,000 barrels per day of renewable fuels. The facility is on track to produce approximately 50,000 barrels per day, or 800 million gallons per year, of renewable fuels by the end of the second quarter, positioning the company as “a leader in renewable fuels,” it remarked.
“We remain committed to delivering increased value to our shareholders. We have returned $9.9 billion to shareholders through share repurchases and dividends since July 2022, on pace to meet our target of $13 billion to $15 billion by year-end 2024. Our strategic priorities put us on a clear path to achieve our $14 billion mid-cycle adjusted EBITDA target by 2025 and return over 50 percent of operating cash flows to shareholders,” Lashier said.
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