Financial Data and Key Metrics Changes - For Q1 2025, the company reported a net loss of $595 million or $1.90 per share, compared to a net income of $1.2 billion or $3.75 per share in Q1 2024 [12] - Adjusted net income for Q1 2025 was $282 million or $0.89 per share, down from $1.3 billion or $3.84 per share in Q1 2024 [12] - The refining segment reported an operating loss of $530 million in Q1 2025, compared to an operating income of $1.7 billion in Q1 2024 [12] - Refining throughput volumes averaged 2.8 million barrels per day with a capacity utilization of 89% in Q1 2025 [13] Business Line Data and Key Metrics Changes - The Renewable Diesel segment reported an operating loss of $141 million in Q1 2025, down from an operating income of $190 million in Q1 2024 [13] - Ethanol segment operating income was $20 million in Q1 2025, compared to $10 million in Q1 2024 [13] - Ethanol production volumes averaged 4.5 million gallons per day in Q1 2025 [14] Market Data and Key Metrics Changes - U.S. light product demand showed a slight increase compared to last year, with product inventories below the same period last year [8] - Diesel sales volumes increased by 6% year-over-year, supported by higher agricultural demand [26] - Total light product demand globally increased by approximately 1 million barrels per day year-over-year [29] Company Strategy and Development Direction - The company is focused on operational excellence, capital deployment with a focus on returns, and maintaining shareholder returns [10] - A $230 million SEC unit optimization project is underway to increase the yield of high-value products, expected to start in 2026 [9] - The company anticipates tight product supply and demand balances, with low product inventories supporting refining fundamentals ahead of the driving season [10] Management Comments on Operating Environment and Future Outlook - Management noted that refining margins improved through the quarter despite a tough margin environment in the renewable diesel segment [7] - The company expects refining throughput volumes to fall within specific ranges for Q2 2025, with cash operating expenses projected at $5.15 per barrel [18][19] - Management expressed confidence in the resilience of the portfolio despite macroeconomic uncertainties [98] Other Important Information - The company returned $633 million to shareholders in Q1 2025, with a payout ratio of 73% [16] - The company ended the quarter with $8.5 billion in total debt and $4.6 billion in cash and cash equivalents, indicating a strong balance sheet [17] Q&A Session Summary Question: Market dynamics and crude differentials - Management noted that sales through the wholesale system were down a few percent, but product exports were up year-over-year [25] - Diesel sales were supported by higher agricultural demand, with total light product inventory drawing down to below the five-year average [30][31] Question: Guidance for Q2 and maintenance impacts - Management confirmed that lower guidance for Q2 is primarily due to maintenance activities, particularly in the North Atlantic and Mid Continent regions [48][49] Question: Decision to close the Peninsula refinery - Management explained that the decision was influenced by California's stringent regulatory environment and the higher costs associated with maintaining the facility [58] Question: Renewable diesel market normalization - Management indicated that the market is still adjusting to the new PTC regime, with expectations for improvement in the back half of the year [75] Question: Update on import permit in Mexico - Management confirmed the reinstatement of the import permit after demonstrating compliance with Mexican authorities [89][90] Question: Cash balance and share buybacks - Management emphasized the strength of the balance sheet and the commitment to returning cash to shareholders through buybacks [97] Question: Diesel inventory outlook - Management acknowledged the tight diesel inventory situation in the U.S. and the potential for increased volatility in the market [148]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported a net loss of $595 million or $1.90 per share, compared to a net income of $1.2 billion or $3.75 per share in Q1 2024 [12] - Adjusted net income for Q1 2025 was $282 million or $0.89 per share, down from $1.3 billion or $3.84 per share in Q1 2024 [12] - The refining segment reported an operating loss of $530 million in Q1 2025, compared to an operating income of $1.7 billion in Q1 2024 [12] - Refining throughput averaged 2.8 million barrels per day with a capacity utilization of 89% [13] Business Line Data and Key Metrics Changes - The Renewable Diesel segment reported an operating loss of $141 million in Q1 2025, down from an operating income of $190 million in Q1 2024 [13] - Ethanol segment operating income was $20 million in Q1 2025, up from $10 million in Q1 2024 [13] - Renewable diesel sales volumes averaged 2.4 million gallons per day in Q1 2025 [13] Market Data and Key Metrics Changes - U.S. light product demand was slightly higher than last year, with product inventories below the same period last year [8] - Diesel sales showed a 6% year-over-year increase, supported by higher agricultural demand [26] - Total light product demand globally increased by approximately 1 million barrels per day year-over-year [29] Company Strategy and Development Direction - The company is focused on operational excellence, capital deployment with a focus on returns, and maintaining shareholder returns [10] - A $230 million SEC unit optimization project is underway to increase the yield of high-value products, expected to start in 2026 [9] - The company anticipates tight product supply and demand balances, with low product inventories supporting refining fundamentals ahead of the driving season [10] Management's Comments on Operating Environment and Future Outlook - Management noted a resilient economy despite macro uncertainties, with expectations of tight gasoline supply in California due to refinery closures [58][148] - The company expects refining cash operating expenses in Q2 2025 to be $5.15 per barrel [19] - Management expressed confidence in the ability to return cash to shareholders, with a commitment to share buybacks supported by a strong balance sheet [98] Other Important Information - The company returned $633 million to shareholders in Q1 2025, with a payout ratio of 73% [16] - The company ended Q1 2025 with $8.5 billion in total debt and $4.6 billion in cash and cash equivalents [17] - The company expects capital investments for 2025 to be approximately $2 billion, with $1.6 billion allocated to sustaining the business [18] Q&A Session Summary Question: Market dynamics and crude differentials - Management noted that sales through the wholesale system were down a few percent, but product exports were up year-over-year [25] - Diesel sales were supported by higher agricultural demand, with a year-over-year increase in gasoline sales of 1% [26] Question: Guidance for Q2 and maintenance impacts - Management confirmed that lower guidance for Q2 is primarily due to maintenance activities, particularly in the North Atlantic and Mid Continent regions [48][106] Question: Decision to close the Peninsula refinery - Management explained that stringent regulatory environments in California influenced the decision to close the refinery, with higher maintenance costs compared to Wilmington [58] Question: Renewable diesel market normalization - Management indicated that the market is adjusting to new PTC regulations, with expectations for improvement in the back half of the year [75] Question: Update on import permit in Mexico - Management confirmed the reinstatement of the import permit after demonstrating compliance with Mexican authorities [89] Question: Cash balance and share buybacks - Management emphasized the strength of the balance sheet and the commitment to returning cash to shareholders through buybacks [98] Question: Diesel inventory outlook - Management acknowledged that California may face gasoline shortages in the coming years, leading to potential volatility in margins [148]

Core Viewpoint - Valero Energy Corporation (VLO) reported a significant adjusted loss in Q1 2025, contrasting sharply with prior earnings and consensus estimates, primarily due to asset impairments and declining refining margins [1][2]. Financial Performance - The adjusted loss for Q1 2025 was $1.90 per share, compared to earnings of $3.82 in the same quarter last year [1]. - Total revenues decreased from $31,759 million in the prior-year quarter to $30,258 million, although this figure exceeded the Zacks Consensus Estimate of $28,450 million [1]. - Adjusted operating income in the Refining segment fell to $605 million from $1.8 billion year-over-year, missing the estimate of $1,022 million [3]. - The Ethanol segment reported an adjusted operating profit of $20 million, down from $39 million in the prior-year quarter, also missing the estimate of $55.1 million [4]. - The Renewable Diesel segment experienced an operating loss of $141 million, a decline from an operating income of $190 million in the previous year [5]. Operational Metrics - Refining throughput volumes increased to 2,828 thousand barrels per day (MBbls/d) from 2,760 MBbls/d year-over-year, surpassing the estimate of 2,786 MBbls/d [6]. - The Gulf Coast region contributed 59.1% to total throughput volume, with Mid-Continent, North Atlantic, and West Coast regions accounting for 16%, 17.4%, and 7.5%, respectively [7]. Margins and Costs - The refining margin per barrel of throughput decreased to $9.78 from $14.07 in the prior year, while operating expenses per barrel rose to $5.07 from $4.71 [8]. - Total cost of sales slightly decreased to $29,751 million from $29,776 million year-over-year, attributed to lower material costs [9]. Capital Investment and Balance Sheet - Capital investment for Q1 totaled $660 million, with $582 million allocated for sustaining the business [10]. - As of March 31, 2025, the company had cash and cash equivalents of $4.6 billion, total debt of $8.5 billion, and finance lease obligations of $2.3 billion [11].

Core Insights - Valero Energy reported $30.26 billion in revenue for Q1 2025, a year-over-year decline of 4.7%, with an EPS of $0.89 compared to $3.82 a year ago, indicating a significant drop in profitability [1] - The revenue exceeded the Zacks Consensus Estimate by 6.36%, while the EPS surprised positively by 106.98% compared to the consensus estimate of $0.43 [1] Financial Performance - The refining margin per barrel in the U.S. Mid-Continent region was $7.87, below the average estimate of $8.98 [4] - In the U.S. West Coast region, the refining margin per barrel was $14.43, exceeding the average estimate of $11.51 [4] - The U.S. Gulf Coast region reported a refining margin of $9.56, above the average estimate of $8.87 [4] - Total throughput volumes per day were 2,828 thousand barrels, slightly above the estimated 2,824.11 thousand barrels [4] - Renewable diesel revenues were $900 million, significantly higher than the estimated $635.55 million, but down 36.2% year-over-year [4] - Ethanol revenues reached $1.23 billion, surpassing the estimated $997.56 million, reflecting an 11% year-over-year increase [4] - Refining revenues totaled $28.76 billion, compared to the estimated $27.22 billion, marking a 4.6% decline year-over-year [4] - Corporate and Eliminations reported -$626 million, better than the estimated -$840.47 million, with a year-over-year change of -30.5% [4] Stock Performance - Valero Energy's shares have returned -14.9% over the past month, compared to the Zacks S&P 500 composite's -5.1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - Valero Energy (VLO) is expected to report a significant decline in quarterly earnings and revenues, with analysts predicting earnings of $0.43 per share, an 88.7% decrease year-over-year, and revenues of $28.45 billion, a 10.4% decrease from the previous year [1]. Earnings Estimates - Over the last 30 days, the consensus EPS estimate for the quarter has been revised upward by 8.3%, indicating a collective reassessment by analysts [2]. - Revisions to earnings projections are crucial for predicting investor behavior and are strongly correlated with short-term stock price performance [3]. Revenue Projections - Analysts estimate 'Total operating revenues - Renewable diesel' at $635.55 million, reflecting a 55% decrease from the prior-year quarter [5]. - The 'Total operating revenues - Ethanol' is projected to be $997.56 million, indicating a 9.6% decline from the year-ago quarter [5]. - 'Total operating revenues - Refining' is expected to be $27.22 billion, showing a year-over-year change of -9.7% [6]. Refining Margins - The consensus for 'U.S. Mid-Continent region - Refining margin per barrel of throughput' is $8.98, down from $13.20 in the same quarter last year [6]. - For the 'U.S. West Coast region - Refining margin per barrel of throughput', the estimate is $11.51, compared to $12.62 a year ago [7]. - The 'U.S. Gulf Coast region - Refining margin per barrel of throughput' is projected at $8.87, down from $14.11 in the same quarter last year [7]. Throughput Volumes - Analysts predict 'Refining - Total Throughput volumes per day' to be 2,824.11 thousand barrels of oil, an increase from 2,760 thousand barrels of oil year-over-year [8]. - 'U.S. Gulf Coast region - Throughput volumes per day' is expected to reach 1,732.09 thousand barrels of oil, up from 1,594 thousand barrels of oil in the same quarter last year [8]. - 'U.S. Mid-Continent region - Throughput volumes per day' is forecasted at 426.77 thousand barrels of oil, down from 452 thousand barrels of oil a year ago [9]. Regional Insights - 'North Atlantic region - Throughput volumes per day' is estimated at 465.99 thousand barrels of oil, slightly up from 449 thousand barrels of oil in the previous year [10]. - The estimated 'North Atlantic region - Refining margin per barrel of throughput' is $11.82, down from $15.67 in the same quarter last year [10]. Stock Performance - Valero Energy shares have returned -17.5% over the past month, underperforming the Zacks S&P 500 composite, which saw a -8.9% change [11].

Core Viewpoint - Phillips 66 (PSX) is expected to report first-quarter 2025 earnings on April 25, with factors influencing performance including gasoline demand, refining margins, and crude oil prices [1][4][5]. Group 1: Previous Quarter Performance - In the last reported quarter, PSX had an adjusted loss of 15 cents per share, which was better than the Zacks Consensus Estimate of a loss of 20 cents, attributed to higher renewable fuel margins and reduced costs [2]. - PSX has beaten the Zacks Consensus Estimate in three of the last four quarters, with an average surprise of 12.95% [2]. Group 2: Earnings Estimates - The Zacks Consensus Estimate for first-quarter earnings per share is 42 cents, reflecting a decline of 77.9% from the same quarter last year [3]. - The estimated revenue for the first quarter is $30.67 billion, indicating a 15.8% decrease from the previous year [3]. Group 3: Market Factors - Demand for gasoline in the U.S. remained resilient, but global challenges such as regional supply imbalances and demand fluctuations may have impacted performance [4]. - A decline in refining margins, as indicated by EIA data showing softer gasoline and distillate crack spreads, could pressure PSX's refining business [5]. - The average spot price for West Texas Intermediate crude was $68.24 per barrel in March 2025, down from $81.28 in March 2024, which may affect revenues in PSX's Midstream and Marketing segments [6]. - Volatility in natural gas prices could squeeze margins if energy costs rise without sufficient pricing power in the downstream market [7]. Group 4: Earnings Whispers - Current analysis does not indicate an earnings beat for PSX, with an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold) [8].

Third-Party Findings Are Based on Feedback From Phillips 66 Investors Representing More Than 60% of the Company's Institutional Shares Outstanding Shareholders Do Not Believe the Company's Strategy or Conglomerate Structure Make Sense WEST PALM BEACH, Fla., April 16, 2025 /PRNewswire/ -- Elliott Investment Management L.P. ("Elliott"), which manages funds that together are a top-five shareholder in Phillips 66 (NYSE: PSX) (the "Company" or "Phillips"), today released findings from a recent Elliott-commissio ...

Core Viewpoint - Elliott Investment Management is seeking strategic, operational, and governance improvements at Phillips 66, supported by former Andeavor CEO Gregory Goff, to enhance shareholder value [1][3]. Group 1: Elliott's Campaign and Support - Elliott Investment Management is a top-five shareholder in Phillips 66 and has launched the "Streamline 66" campaign to boost shareholder value [1]. - Gregory Goff, with over 40 years of experience in the energy sector, including significant roles at ConocoPhillips and Andeavor, is supporting Elliott's efforts [2]. - Goff's leadership at Andeavor resulted in a remarkable 1,200% increase in shareholder returns, showcasing his capability in financial and operational transformations [2]. Group 2: Strategic Vision for Phillips 66 - Both Elliott and Goff believe that with necessary improvements, Phillips 66 can become a stronger and more valuable company for employees and investors [3]. - Elliott has filed a definitive proxy statement with the SEC to solicit proxies for the election of its director candidates at the upcoming 2025 annual meeting [4]. Group 3: Background on Elliott - Elliott Investment Management manages approximately $72.7 billion in assets as of December 31, 2024, and has a diverse investor base including pension plans and sovereign wealth funds [5].

Core Insights - Elliott Investment Management has launched the Streamline 66 Podcast to discuss its campaign for change at Phillips 66, featuring conversations with director nominees and industry experts [1][2] - The first episode features Brian Coffman, a seasoned operator with extensive experience in refining, including leadership roles at ConocoPhillips and Motiva [3] Company Overview - Phillips 66 is a major player in the refining industry, and Elliott Investment Management is a top five shareholder in the company [1][8] - Elliott is seeking to elect four highly qualified nominees to the Board of Directors during the upcoming Annual Meeting [2][5] Industry Context - Brian Coffman emphasizes the potential of Phillips 66's refining assets, countering the notion that they are outdated, and aims to restore the company's historical operating excellence [7] - The podcast aims to provide shareholders with insights into the nominees and Elliott's vision for Phillips 66 [2][3]

Core Viewpoint - Elliott Investment Management argues that Phillips 66 has consistently underperformed compared to its industry peers, with shares lagging behind Valero Energy and Marathon Petroleum by -138% and -188% over the past decade, respectively [1][10]. Group 1: Streamline 66 Plan - Elliott proposes a three-part "Streamline 66" plan aimed at increasing Phillips' stock price to over $200 per share, which includes simplifying the portfolio, reviewing refinery operations, and enhancing Board oversight [2][12]. - The plan emphasizes the need to divest non-core assets, such as the midstream business, which could be valued at over $40 billion, to focus on improving refining operations [21]. Group 2: Board Accountability and Governance - Elliott advocates for all directors to commit to a one-year term and stand for election at each Annual Meeting, enhancing accountability and governance [3][31]. - The current staggered Board structure limits accountability, and past proposals to address this have failed due to the high voting threshold required [32][34]. Group 3: Director Nominees - Elliott has nominated four highly qualified director candidates to bring necessary experience and perspectives to the Board, including individuals with significant backgrounds in refining and energy sectors [6][29]. - The nominees are expected to enhance Board independence and oversight, which is crucial for restoring investor trust and improving company performance [30]. Group 4: Historical Context and Comparisons - Elliott draws parallels with Marathon Petroleum, which successfully implemented changes after Elliott's engagement, resulting in a ~150% relative outperformance in share price [11]. - The letter highlights that Phillips 66's management has resisted necessary changes and has not prioritized shareholder value, leading to ongoing underperformance [9][25].