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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.

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Results for PSX
$PSX
31 Mar 15 16:53:12
$PSX: Phillips 66 to Host Annual Meeting of Shareholders: http://t.co/MQ0wC9H1A8 http://t.co/QGZuAL854P http://t.co/QGZuAL854P
$PSX
31 Mar 15 16:53:12
$PSX: Phillips 66 to Host Annual Meeting of Shareholders: http://t.co/LI0JYqgXs3 http://t.co/QGZuAL854P http://t.co/QGZuAL854P
$PSX
31 Mar 15 16:53:12
$PSX: Phillips 66 to Host Annual Meeting of Shareholders: http://t.co/teBeuvAUWV http://t.co/QGZuAL854P http://t.co/QGZuAL854P
$PSX
31 Mar 15 16:53:12
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$PSX
31 Mar 15 16:53:12
$PSX - Phillips 66 to Host Annual Meeting of Shareholders http://t.co/NgEDa9Oz1a http://t.co/QGZuAL854P http://t.co/QGZuAL854P
$PSX
31 Mar 15 16:53:11
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$PSX
31 Mar 15 16:36:17
$PSX: Phillips 66 to Host Annual Meeting of Shareholders: http://t.co/MQ0wC9H1A8 http://t.co/QGZuAL854P
$PSX
31 Mar 15 16:36:16
$PSX: Phillips 66 to Host Annual Meeting of Shareholders: http://t.co/LI0JYqgXs3 http://t.co/QGZuAL854P
$PSX
31 Mar 15 16:36:15
$PSX: Phillips 66 to Host Annual Meeting of Shareholders: http://t.co/teBeuvAUWV http://t.co/QGZuAL854P
$PSX
31 Mar 15 16:36:15
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$PSX
31 Mar 15 16:36:15
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ProTradersNews
31 Mar 15 16:35:02
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StockNewsWires
31 Mar 15 16:30:02
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Breaking News
31 Mar 15 16:25:02
$PSX: Phillips 66 to Host Annual Meeting of Shareholders: http://t.co/zobeGRBuYK
ProVesting
31 Mar 15 16:20:03
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$PSX
31 Mar 15 16:19:21
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NASDAQ
31 Mar 15 16:19:06
$PSX - Phillips 66 to Host Annual Meeting of Shareholders http://t.co/kDXiRVOS5T
$PSX
31 Mar 15 16:03:51
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31 Mar 15 15:49:16
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$PSX
31 Mar 15 15:32:41
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$PSX
31 Mar 15 15:16:37
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$PSX
31 Mar 15 14:59:05
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31 Mar 15 14:59:04
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Katherine Feser
31 Mar 15 14:45:41
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31 Mar 15 14:28:17
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31 Mar 15 14:14:29
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31 Mar 15 11:50:31
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By  +Follow July 31, 2013 1:27PM
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