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Phillips 66 Pops On Earnings Miss

By  +Follow July 31, 2013 1:27PM
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Phillips 66 (PSX) , by market cap the world’s largest oil and gas refiner and marketer, posted second-quarter earnings on Wednesday morning that showed the company’s profits were significantly lower than expected.

Phillips is in the habit of beating earnings forecasts on a regular basis, but for the recently ended period, the company netted $958 million, or $1.53 per share on revenue of $43.95 billion, compared to the prior-year period during which the company made $1.18 billion, or $1.86 per share. Analysts had expected earnings of $1.81 per share on revenue of $42.03 billion.

The recent increase in US oil prices was cited as one of the reasons for the diminished results, but the company’s refining operations were also substantially hampered by a hike in the cost of ethanol credits, otherwise known as Renewable Identification Numbers (RINS).

In 2005, the Environmental Protection Agency implemented the Renewable Fuel standard, imposing a gradual decrease in the burning of fossil fuels by requiring refiners to blend increasing amounts of ethanol into their products, with the goal of adding 36 billion gallons of renewable fuel into the overall supply by 2022. The EPA tracks the compliance of oil and gas refiners through RINS, which operate as credits; in other words, a company can acquire RINS through the purchase and subsequent blending of ethanol into its products or, if it does not comply, can meet its RINS requirements by purchasing them from other companies.

As ethanol minimums have increased, so too has the cost of RINS, and oil companies claim that the higher prices are starting to inflate the cost of doing business. On a conference call discussing the company’s quarterly performance, Phillips 66 said that it will increase exports in the third quarter to offset higher prices.

Still, the rare miss on top and bottom lines was offset by the company’s approval of a $1 billion share buyback program, as well as a debt reduction of $500 million. Shares were down about 3 percent before the commencement of trading, but rebounded nearly 5 percent after the opening bell to $61.36.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for PSX
BreakingStocksNews
28 Feb 15 09:06:03
$PSX: Phillips 66: I Am Rationally Exuberant (PSX): http://t.co/s0SRnPuwVp
NASDAQ
28 Feb 15 09:00:09
$PSX - Phillips 66: I Am Rationally Exuberant http://t.co/IpZpZMAJpv
Maggie Smith
28 Feb 15 09:00:07
$PSX - Phillips 66: I Am Rationally Exuberant http://t.co/5QKVzAtOXS
Quantpost Basic Mats
28 Feb 15 08:59:05
$PSX News: "Phillips 66: I Am Rationally Exuberant $PSX …" http://t.co/sSSFcsul31 Board view: https://t.co/4DLyHhaPpa
Long & Short Ideas
28 Feb 15 08:59:04
Phillips 66: I Am Rationally Exuberant http://t.co/dhi79D3k3T $PSX
Seeking Alpha
28 Feb 15 08:59:03
Phillips 66: I Am Rationally Exuberant http://t.co/Zd5CfaZPgP $PSX
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27 Feb 15 22:20:19
#Phillips 66 : Oil transport company seeks safe passage http://t.co/4X4Y4cagZY $PSX
Dakota Financial
27 Feb 15 22:03:03
Traders Sell Shares of Phillips 66 on Strength $PSX http://t.co/lax3S3QTpQ
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27 Feb 15 13:57:43
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27 Feb 15 11:20:30
lookn4wins: Stock Charts: PSX -1.57% Stock Charts $PSX Phillips 66 (NYSE) http://t.co/iLHZKu90ue
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27 Feb 15 11:18:48
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27 Feb 15 11:18:40
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27 Feb 15 11:16:40
PSX -1.57% Stock Charts $PSX Phillips 66 (NYSE) Any opinions on PSX? Please reply to this post. Last Updated: http://t.co/Z0v0NnitXC
Ian Hartsig
27 Feb 15 09:26:33
@JustinPulitzer thanks! Also have you looked at $PSX ? Been in for a while, not sure how much it can break above current resistance.
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27 Feb 15 09:11:59
$HFC Is HollyFrontier #Stock Worth Considering Right Now? #refiners $PSX $VLO $TSO http://t.co/IHszzD0aio
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27 Feb 15 08:41:30
Listen up CEOs!!! $SD is a great buyout target for $XOM $CVX $OXY $PSX $EOG? Great assets at fire sale prices for an acquirer!!!
FinancialJuice
27 Feb 15 06:01:49
Dan Loeb likes Phillips 66 $PSX #stocks
Quantpost Basic Mats
27 Feb 15 05:34:02
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27 Feb 15 05:34:01
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Erik van Erne
27 Feb 15 03:38:04
RT @chrispycrunch: Suncor $SU a Good Rebound Play As Oil Prices Recover - the risk/reward profile is $BP $XOM $PSX ... http://t.co/xE8yFbtO…
BreakingStocksNews
27 Feb 15 02:26:03
$PSX: Large Outflow of Money Witnessed in Phillips 66: http://t.co/3TwQGXBoPE
sweitzer
26 Feb 15 20:35:43
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ProVesting
26 Feb 15 19:36:02
$PSX: Traders Sell Phillips 66 on Strength (PSX): http://t.co/2NUvdSD4Y1
InterCooler
26 Feb 15 19:32:49
Traders Sell Phillips 66 on Strength $PSX http://t.co/jwVDN6qVFJ
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26 Feb 15 09:46:40
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26 Feb 15 09:15:18
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Ob1e_One
26 Feb 15 09:02:14
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26 Feb 15 08:35:30
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26 Feb 15 08:18:42
RT @chrispycrunch: Suncor $SU a Good Rebound Play As Oil Prices Recover - the risk/reward profile is $BP $XOM $PSX ... http://t.co/xE8yFbtO…
J.P. Shepard
26 Feb 15 06:52:37
Phillips 66 Upgraded by TheStreet to Buy $PSX http://t.co/EaJPbqd1UL via @RatingsNetwork
Home Theater Experts
26 Feb 15 06:09:29
RT @chrispycrunch: Suncor $SU a Good Rebound Play As Oil Prices Recover - the risk/reward profile is $BP $XOM $PSX ... http://t.co/xE8yFbtO…
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25 Feb 15 22:53:20
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25 Feb 15 10:56:56
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25 Feb 15 09:16:47
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25 Feb 15 06:18:38
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Breaking News
25 Feb 15 06:01:03
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25 Feb 15 05:25:15
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25 Feb 15 05:16:43
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25 Feb 15 04:21:04
$PSX: Price Target Update on Phillips 66: http://t.co/NPZQxyhf1e
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25 Feb 15 03:02:46
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25 Feb 15 00:55:31
Research Analysts’ Weekly Ratings Changes for Phillips 66 $PSX http://t.co/NfW0Chq0hA
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25 Feb 15 00:47:07
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WKRB News
25 Feb 15 00:45:18
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24 Feb 15 18:57:15
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Anita Howard
24 Feb 15 18:43:01
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Jack Hart
24 Feb 15 16:18:51
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FinSentS SP500
24 Feb 15 15:10:39
$PSX:US Phillips 66 Upgraded by TheStreet to Buy (PSX) #PHILLIPS 66 http://t.co/YoldVL4LjB #SP500
				
				
By  +Follow July 31, 2013 1:27PM
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