Phillips 66 Q2 Earnings & Revenues Beat on Higher Refining Margins

Core Insights - Phillips 66 (PSX) reported second-quarter 2025 adjusted earnings of $2.38 per share, exceeding the Zacks Consensus Estimate of $1.66, and improved from $2.31 in the same quarter last year [1] - Total quarterly revenues reached $33.5 billion, surpassing the Zacks Consensus Estimate of $30.5 billion, although this represents a decline from $38.9 billion year-over-year [1] Financial Performance - The better-than-expected quarterly results were primarily driven by increased refining volumes and higher realized refining margins globally, despite lower contributions from the chemicals and midstream segments [2] - Total costs and expenses decreased to $32.4 billion from $37.6 billion in the prior year, while the projection was $27.3 billion [10] - The company generated $845 million of net cash from operations, down from $2,097 million in the year-ago period, with capital expenditures totaling $587 million and dividends paid out amounting to $487 million [11] Segmental Results - Midstream: Adjusted pre-tax earnings were $731 million, down from $753 million year-over-year but exceeded the estimate of $305.1 million, affected by lower transportation volumes and property taxes [3] - Chemicals: Adjusted pre-tax earnings fell to $20 million from $222 million in the prior year, missing the estimate of $198.3 million due to lower margins from decreased sales prices [4] - Refining: Adjusted pre-tax earnings increased to $392 million from $302 million year-over-year, surpassing the estimate of $303.2 million, attributed to higher refining margins and volumes [5] - Marketing & Specialties: Adjusted pre-tax earnings rose to $660 million from $415 million, beating the projection of $345.6 million, driven by higher marketing fuel margins [7] - Renewable Fuels: The segment reported an adjusted pre-tax loss of $133 million, wider than the $55 million loss in the prior year, and missing the projected earnings of $3.4 million [8] Refining Margins - Realized refining margins increased to $11.25 per barrel from $10.01 year-over-year, with notable increases in the Central Corridor and Gulf Coast [6] Financial Condition - As of June 30, 2025, cash and cash equivalents stood at $1.1 billion, with total debt at $20.9 billion, reflecting a debt-to-capitalization ratio of 42% [11]