Phillips 66 margins also hurt by higher costs, lower volumes
Feb 3 (Reuters) – U.S. independent oil refiner Phillips 66 posted a lower-than-expected quarterly profit as margins were squeezed by the narrowing gap between prices of U.S. crude and refined products.
The company’s shares were down 1 per cent at $80.20 in premarket trading on Friday.
U.S. refiners, which were facing pricing pressure due to a glut of refined products, are now being challenged by a rise in crude prices.
Phillips’ worldwide realized refining margins fell 31.2 per cent to $6.47 in the fourth quarter. Smaller rival Valero Energy Corp, which reported fourth-quarter results on Tuesday, also reported a 24.4 per cent drop in refining throughput margin to $8.22.
The company posted an adjusted loss from its refining business of $95 million in the fourth quarter ended Dec. 31, compared with adjusted earnings of $376 million a year earlier.
Refining margins were also hurt by higher costs and lower volumes due to maintenance-related activities, Phillips said.
Phillips’ worldwide crude utilization rate was 93 per cent, down from 97 per cent in the third quarter.
Consolidated earnings fell to $163 million, or 31 cents per share, in the quarter from $650 million, or $1.20 per share, a year earlier.
The company reported adjusted earnings of 16 cents per share, well below analysts’ average estimate of 40 cents, according to Thomson Reuters I/B/E/S.
Total revenue and other income rose 7.4 per cent to $23.67 billion, beating analysts’ estimate of $22.50 billion.
(Reporting by Arathy S Nair in Bengaluru; Editing by Anil D’Silva)