(Reuters) -Refiner Phillips 66 beat Wall Street estimates for second-quarter profit on Friday, helped by higher refining margins and lower turnaround expenses.
Top U.S. refiners were expected to post higher second-quarter profit, rebounding from losses in the prior quarter as stronger-than-expected diesel margins lifted earnings.
The improved margins helped peers such as Valero Energy surpass Wall Street estimates.
Fuelmakers have seen an unexpected boost in profit from key products in recent months, offering relief as earnings retreated from 2022 highs, driven by a post-pandemic demand rebound and supply disruptions following Russia’s invasion of Ukraine.
The company’s realized margin per barrel rose 12.4% to $11.25 in the quarter from a year ago, while turnaround expenses fell 47% at $53 million.
Its crude capacity utilization was 98%, while adjusted earnings from its refining segment rose about 30% at $392 million.
“During the quarter, Refining ran at the highest utilization since 2018, achieved its lowest cost per barrel since 2021, strong market capture and record year-to-date clean product yield,” CEO Mark Lashier said.
The results come after a board fight in May, where Phillips 66 and activist investor Elliott Investment Management each won two board seats at an annual shareholders meeting.
As part of its argument for actions to boost share price, Elliott had advocated exploring the sale or spin off of its midstream business and other asset divestments, to focus on the company’s refining operations.
In the second quarter, the refiner’s quarterly adjusted earnings for its midstream segment was down about 3% at $731 million from a year ago.
The company reported an adjusted profit of $2.38 per share for the three months ended June 30, compared with analysts’ average estimate of $1.71, according to data compiled by LSEG.
Shares of the company were up about 1% at $125.50 in premarket trading.
(Reporting by Tanay Dhumal in Bengaluru; Editing by Arun Koyyur)
Comments