PSX Q3 Earnings Beat on Higher Refining Margins, Revenues Fall Y/Y

Core Insights - Phillips 66 (PSX) reported third-quarter 2025 adjusted earnings of $2.52 per share, exceeding the Zacks Consensus Estimate of $2.07 and improving from $2.04 in the same quarter last year [1][9] - Total quarterly revenues reached $35 billion, surpassing the Zacks Consensus Estimate of $30 billion, although this represents a decline from $36.2 billion year-over-year [1][9] Segment Performance - Midstream: Adjusted pre-tax earnings were $697 million, up from $672 million year-over-year, but slightly below the estimate of $706 million, driven by stronger NGL business results [3] - Chemicals: Adjusted pre-tax earnings fell to $176 million, a 49% decrease from $342 million in the prior-year quarter, missing the estimate of $304.7 million due to weaker polyethylene chain margins and higher feedstock costs [4][9] - Refining: Adjusted pre-tax earnings improved to $430 million from a loss of $67 million in the year-ago quarter, exceeding the estimate of $80.9 million, attributed to higher realized refining margins [5][9] - Marketing & Specialties: Adjusted pre-tax earnings declined to $477 million from $583 million year-over-year, although it beat the projection of $392.2 million, due to lower marketing fuel margins [7] Refining Margins - Realized refining margins increased to $12.15 per barrel from $8.31 year-over-year, with notable increases in various regions: Central Corridor ($15.82 from $14.19), Gulf Coast ($8.74 from $6.39), West Coast ($12.31 from $4.34), and Atlantic Basin/Europe ($11.94 from $5.87) [6] Financial Overview - Total costs and expenses decreased to $34.8 billion from $35.8 billion year-over-year, while the projection was $26.1 billion [11] - The company generated $1.2 billion in net cash from operations, up from $1.1 billion in the prior year, with capital expenditures totaling $541 million and dividends paid out amounting to $484 million [12] - As of September 30, 2025, cash and cash equivalents stood at $2 billion, with total debt at $21.8 billion, reflecting a debt-to-capitalization ratio of 44% [12]