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Phillips 66 Pops On Earnings Miss

By  +Follow July 31, 2013 1:27PM
Tickers Mentioned:

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.

Results for PSX
BV Basic Materials
16 Apr 14 18:02:29
$PSX Phillips 66 to Host Annual Meeting of Stockholders.. http://t.co/j7APLbCh5u
16 Apr 14 16:43:34
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16 Apr 14 16:01:31
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16 Apr 14 16:01:26
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16 Apr 14 15:57:33
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16 Apr 14 15:53:35
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16 Apr 14 15:28:57
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16 Apr 14 15:14:23
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Claudine Salcido
16 Apr 14 15:07:16
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16 Apr 14 15:05:10
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Peter D. Hofmann
16 Apr 14 14:30:34
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Dmitri Magnuson
16 Apr 14 13:37:17
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Peter D. Hofmann
16 Apr 14 13:36:03
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Gala Arredon
16 Apr 14 11:55:23
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Marquette Associates
16 Apr 14 11:14:50
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16 Apr 14 10:17:06
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Darryl Kendall
16 Apr 14 10:04:50
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Matthew DiLallo
16 Apr 14 09:57:10
There's 1 Way Phillips 66 Plans to Create Big Value for Investors ( $PSX) http://t.co/UnxmyenibA
Franco Cox
16 Apr 14 09:47:10
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16 Apr 14 08:38:34
Phillips 66 Stock Rating Lowered by Tudor Pickering $PSX http://t.co/JrLvI73En2
Media Sentiment
16 Apr 14 08:26:33
$PSX received a new alert. Find out why at http://t.co/WHJp8eTsSr #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 214
Zolmax News
16 Apr 14 08:22:49
Phillips 66 Upgraded by TheStreet to Buy $PSX http://t.co/p1QiUtV2GI
Crew Dailyoxj
16 Apr 14 07:52:45
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Lutz Braune
16 Apr 14 07:01:41
$PSX: Phillips 66 to Host Annual Meeting of Stockholders http://t.co/WnTaRmxtlb
Yahaira Landry
16 Apr 14 06:58:14
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Peter D. Hofmann
16 Apr 14 06:55:34
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16 Apr 14 06:53:06
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Mari Keith
16 Apr 14 06:49:04
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16 Apr 14 06:32:19
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16 Apr 14 05:31:01
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16 Apr 14 04:52:18
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16 Apr 14 04:23:24
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16 Apr 14 02:48:31
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16 Apr 14 00:50:05
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15 Apr 14 23:50:08
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15 Apr 14 23:34:16
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15 Apr 14 22:30:59
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15 Apr 14 21:06:12
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15 Apr 14 20:56:40
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15 Apr 14 20:39:38
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15 Apr 14 18:20:18
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15 Apr 14 18:20:17
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15 Apr 14 18:09:19
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By  +Follow July 31, 2013 1:27PM



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