Phillips 66 Stock Under Pressure As Refining Losses Offset Midstream Gains

Phillips 66 (NYSE: PSX) shares are trading lower on Friday after the company reported fourth-quarter FY24 results. The stock is down about 2% at $118.33 at the last check Friday. The company reported adjusted earnings of $(0.15) per share, missing analyst estimates of $(0.23). The stock has been under pressure recently, as investors have been concerned about the company's refining operations and the impact of lower refining margins on the company's earnings.

Phillips 66's refining segment reported an adjusted pre-tax loss of $(759) million in the fourth quarter, compared to a loss of $(67) million in the prior quarter. The company's refining operations have been struggling with lower realized margins, as market crack spreads have been reducing. Additionally, the company has been facing higher depreciation related to the planned stoppage of operations at the Los Angeles Refinery, which has impacted earnings. The company's refining operations have been running at 94% crude capacity utilization and 88% clean product yield, but these metrics have not been enough to offset the impact of lower margins.

The company's midstream segment, on the other hand, reported adjusted pre-tax income of $708 million in the fourth quarter, up from $672 million in the prior quarter. The midstream segment has been performing well, driven by increased NGL margins and volumes. The company's midstream segment has been a key driver of the company's earnings growth, and has helped to offset the impact of lower refining margins.

Phillips 66 has been taking steps to mitigate the impact of lower refining margins and improve the company's overall performance. The company has announced a new strategic initiative to return over 50% of operating cash flow to shareholders, and has set new financial and operational targets that prioritize debt reduction, a lowered cost structure, and EBITDA growth. The company has also announced an agreement to acquire EPIC's NGL business, which is expected to be accretive to earnings and highly integrated with the company's existing infrastructure.

However, the company's refining operations continue to be a concern for investors. The company's refining segment has been struggling with lower realized margins, and the company has been facing higher depreciation related to the planned stoppage of operations at the Los Angeles Refinery. The company's refining operations have been running at 94% crude capacity utilization and 88% clean product yield, but these metrics have not been enough to offset the impact of lower margins.



Phillips 66's stock has been under pressure recently, as investors have been concerned about the company's refining operations and the impact of lower refining margins on the company's earnings. The company's refining segment has been struggling with lower realized margins, and the company has been facing higher depreciation related to the planned stoppage of operations at the Los Angeles Refinery. The company's midstream segment, on the other hand, has been performing well, driven by increased NGL margins and volumes. The company has been taking steps to mitigate the impact of lower refining margins and improve the company's overall performance, but the company's refining operations continue to be a concern for investors.

In conclusion, Phillips 66's stock is under pressure as refining losses offset midstream gains. The company's refining operations have been struggling with lower realized margins, and the company has been facing higher depreciation related to the planned stoppage of operations at the Los Angeles Refinery. The company's midstream segment, on the other hand, has been performing well, driven by increased NGL margins and volumes. The company has been taking steps to mitigate the impact of lower refining margins and improve the company's overall performance, but the company's refining operations continue to be a concern for investors.