US refiner Phillips 66 posts bigger-than-expected quarterly loss as margins bite - Reuters

US refiner Phillips 66 posts bigger-than-expected quarterly loss as margins bite - Reuters

Phillips 66, a major U.S. refiner, reported a bigger-than-expected loss for the first quarter of 2025, primarily due to lower refining margins and extensive maintenance activities. The company’s refining unit posted a net loss of $937 million, compared to a year-ago profit of $216 million [1].

The quarterly loss was exacerbated by a 38% decline in realized refining margins to $6.81 per barrel, while turnaround costs rose more than two-fold to $270 million. Crude capacity utilization stood at 80%, down from 92% in the same period last year [1].

The company's results mirror those of rival Valero Energy, which also reported a quarterly loss due to lower refining margins. CEO Mark Lashier attributed the loss to both a challenging macro environment and the impact of one of the company's largest-ever spring turnaround programs [1].

Phillips 66’s Chief Financial Officer, Kevin Mitchell, expressed optimism for the remainder of the year, noting that the bulk of the turnarounds are complete and margins are expected to improve significantly. He stated that margins in April were $3 to $4 per barrel higher than the average in the first quarter [1].

The company's shares fell 1.4% to $103.27 in mid-day trade, reflecting investor concerns over the quarterly results and the ongoing boardroom battle with activist investor Elliott Investment Management. The U.S. energy sector is also grappling with the potential impact of President Donald Trump's tariffs and the intensifying trade war with China, which could affect demand for refined products [1].

Additionally, Phillips 66 announced plans to construct a 300 million cubic feet per day gas plant in the Permian Basin, with operations expected to commence in 2027. The company posted an adjusted loss of 90 cents per share for the first quarter, compared to analysts' estimates of 72 cents per share [2].

References:
[1] https://www.marketscreener.com/quote/stock/PHILLIPS-66-10447684/news/US-refiner-Phillips-66-posts-bigger-than-expected-quarterly-loss-as-margins-bite-49720854/
[2] https://www.investing.com/news/stock-market-news/us-refiner-phillips-66-posts-bigger-than-expected-quarterly-loss-4004290