Refining Margins Boost Earnings at Phillips 66

On a GAAP basis, the company posted first-quarter EPS of $2.23, which excludes $26 million in one-time charges.

Phillips 66 did not provide guidance in its earnings release, but the consensus estimates for the second quarter are EPS of $2.26 on revenues of $43.53 billion. For the full year, the consensus estimate calls for EPS of $7.86 on revenues of $182.39 billion.

The company’s CEO said:

We achieved strong financial results in the first quarter by capturing favorable chemicals and refining margins. … Increasing shareholder distributions remains a key component of our strategy and value proposition. During the quarter, we paid an increased dividend and repurchased $382 million of stock as part of our $2 billion share repurchase program. Since the company’s inception a year ago, we have returned $1.2 billion of capital to shareholders through dividends and share repurchases.

The company’s adjusted refining division income totaled $909 million for the first quarter, nearly double the total from the same period a year ago. The company was able to source 68% of its crude feedstock for lower-cost Canadian crude. Of its total average daily refinery throughput of 563,000 barrels of heavy crude, 190,000 barrels were sourced from Canada and 120,000 barrels came from the Eagle Ford, Bakken and Mississippian Lime plays. Phillips 66 also ran 311,000 barrels a day of light West Texas Intermediate (WTI) crude.

Phillips 66 recently announced plans to construct a 100,000 barrel-per-day natural gas fractionator, which if approved would begin production in mid-2015. The company also continues to work toward a spin-off of Phillips 66 Partners, which it expects to complete in the second half of this year.

Phillips 66 shares are up about 2.4% in premarket trading, at $62.40 in a 52-week range of $28.75 to $70.52. Thomson Reuters had a consensus analyst price target of around $71.20 before today’s report.