Phillips 66 Reports Strong Quarterly Profit

(Reuters) – Phillips 66 (NYSE:PSX) exceeded quarterly profit estimates due to robust performance in its chemicals and midstream sectors, despite a decline in refining margins amid weak fuel demand.

The company, which operates nearly 72,000 miles of U.S. pipeline systems, has increased fuel movement this year, enhancing its natural gas liquids market share.

Volumes of super-chilled fuel flowing through its pipelines reached 2.79 million barrels per day in the first nine months of 2024, compared to 2.70 million bpd in 2023.

In the third quarter, adjusted profit rose by 15.6% year-over-year, significantly aided by a more than three-fold increase in adjusted profit from its chemicals segment, now at $342 million, along with a 4.7% reduction in expenses.

However, the refining segment faced challenges with reduced realized margins, as crack spreads decreased to $8.31 per barrel this quarter from $19.06.

Shares for the company experienced a near 2.2% decline during morning trading.

U.S. refinery margins, reflected by the 3-2-1 crack spread, fell to $14.28 in mid-September, the lowest since early 2021.

Globally, refiners are struggling with profitability due to soft consumer and industrial demand, particularly in China. Earlier today, British energy giant BP (NYSE:BP) also reported a dip in third-quarter profits attributed to weaker refining margins and slowing oil demand.

Phillips 66's third-quarter adjusted profit was $2.04 per share, surpassing analysts' average estimate of $1.66, according to data compiled by LSEG.