Analyst Note| Allen Good, CFA |
Phillips 66 saw earnings deteriorate during the second quarter, but this probably marked a low point as market conditions have already begun to improve. The company reported a second-quarter adjusted loss of $324 million compared with adjusted earnings of $1.4 billion a year ago due to a sharp decline in earnings across all segments, but primarily in refining. Midstream adjusted earnings fell to $245 million from $423 million last year on lower natural gas liquids volumes and lower pipeline volumes. Chemical adjusted earnings fell to $89 million from $275 million a year ago on lower margins. Refining reported adjusted earnings of a $867 million loss compared with earnings of $983 million a year ago on lower margins and reduced volumes. The marketing and specialties segment adjusted earnings fell to $293 million from $353 million a year earlier on lower volumes and lower realized margins.