Phillips 66 Earnings: First-Quarter Results Short of Expectations, but Long-Term Targets on Track

Phillips 66 reported first-quarter adjusted earnings of $822 million versus $2.0 billion a year ago, falling short of market expectations. A sharp drop in refining earnings was largely the reason for the decline, although the midstream and marketing segments also reported declines. Adjusted earnings for the refining segment fell to $228 million from $1.6 billion a year ago on a decrease in realized margins to $10.91 per barrel, from $20.72/bbl a year ago, which was due in part to a weaker capture rate of 69% during the quarter. Ongoing conversion of the Rodeo facility to produce biofuels played a role—that project is due for completion later this year—and as such, we expect Phillips 66 to register improvements in the future given projects underway to improve capture by 5% by 2025.