Phillips 66 (NYSE:PSX) stock traded lower Wednesday despite reporting second-quarter earnings and revenue that topped Wall Street estimates, as a broad selloff in energy stocks and weaker crude oil prices overshadowed the strong results.
The company reported adjusted earnings of $9.41 per share, beating the analyst consensus estimate of $7.44. Revenue rose to $52.04 billion, above the consensus estimate of $43.72 billion.
The company’s profit surged as higher refining margins, fueled by Middle East conflict-related supply disruptions, boosted U.S. refiners, Reuters reported.
Earnings Snapshot
GAAP earnings increased to $3.85 billion, or $9.55 per share, from $207 million, or 51 cents per share, in the first quarter of 2026. Results included pre-tax special-item adjustments of $69 million in Marketing and Specialties and negative $24 million in Refining.
Operating cash flow totaled $7.26 billion, compared with a cash outflow of $2.26 billion in the prior quarter.
The company reported record natural gas liquids (NGL) fractionation and liquefied petroleum gas (LPG) export volumes. Refining utilization was 96%, with an 86% clean product yield.
As of June 30, cash and cash equivalents totaled $4.1 billion, with $6.4 billion of committed credit facility capacity.
Phillips 66 reduced total debt by $6.6 billion to $20.6 billion, lowering net debt to $16.5 billion.
Last week, the company said its board approved a $10 billion increase to its share repurchase authorization.
Segment Performance
Adjusted earnings in the Refining segment jumped to $3.1 billion from $208 million in the first quarter, driven by higher realized margins, wider market crack spreads and favorable mark-to-market impacts.
Midstream adjusted earnings increased to $785 million from $591 million in the first quarter, reflecting stronger margins and higher volumes, as well as the absence of disruptions related to Winter Storm Fern.
Chemicals adjusted earnings rose to $404 million from $85 million in the first quarter as margins improved.
Marketing and Specialties adjusted earnings increased on stronger global marketing margins and favorable mark-to-market impacts.
Renewable Fuels pre-tax income improved, supported by higher regulatory credit pricing, increased renewable fuels production and favorable mark-to-market impacts.
Projects And Outlook
Phillips 66 reached full production at the Dos Picos II gas plant in the Permian Basin, adding 220 million cubic feet per day of processing capacity.
The company also announced plans to build the 300 million cubic feet per day Zeus Gas Plant in the Permian Basin and a 100,000-barrels-per-day Coastal Bend NGL Fractionator in Corpus Christi.
The company completed turnarounds at its Wood River and Humber refineries. Chevron Phillips Chemical also advanced the Golden Triangle Polymers Project in Texas and the Ras Laffan Polymers Project in Qatar, both of which are expected to begin full operations in 2027.
For the third quarter, Phillips 66 expects global olefins and polyolefins utilization in the low-90% range and refining crude utilization in the mid-90% range.
Looking ahead to 2027, the company expects more than $1 billion of mid-cycle adjusted EBITDA growth from its Midstream and Chemicals businesses and aims to reduce total debt to $17 billion.
PSX Price Action: Phillips 66 shares were down 1.58% at $202.63 at the time of publication on Wednesday, according to Benzinga Pro data.
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