Phillips 66, the refiner, reports a Q3 profit increase on the strength of midstream and chemicals
Phillips 66 surpassed quarterly profit expectations on Tuesday, as its chemical and midstream segments were able to more than compensate for a decline in refinery margins due to a lackluster fuel demand.
This year, the company has increased its market share for natural gas liquids by expanding its pipelines. It owns more than 72,000 miles in U.S.
The super-chilled fuel volumes that passed through the pipelines in the first nine month of 2024 increased to 2,79 million barrels a day, up from 2.70 million bpd.
The company reported that its adjusted third-quarter profit increased 15.6% compared to a year ago.
The chemicals segment posted a profit adjusted of $342 millions, up from $104million a year ago.
The lower crack spreads in its refining division led to a decline in the realized margins. The quarter saw margins drop to $8.31 a barrel from $19.06 per barrel.
U.S. refinery profit margins measured by the 3-2-1 Crack Spread
Refiners around the world have experienced a decline in profitability due to a softening of consumer and industrial demand. This is especially true in China because of the slowing of economic growth and increasing penetration of electric cars.
BP, the British energy giant, reported a decline in its third-quarter profits due to lower refining margins.
Valero, a rival company, reported last week a decline in its third-quarter profits but still managed to exceed earnings expectations.
According to LSEG data, Phillips 66 reported a third-quarter adjusted net profit of $2.04 per common share. This is well above the average analyst estimate of $1.66.
The company also returned $1.3 billion in dividends and stock repurchases to its shareholders during the third quarter. (Reporting from Seher Dareen, Bengaluru. Editing by Shinjini Ganuli.)
(source: Reuters)
