Phillips 66 reported a sharp rebound in second-quarter earnings, powered by stronger refining margins, higher midstream volumes and improved performance across its integrated portfolio.

 

The Houston-based energy company posted $3.8 billion in second-quarter earnings, or $9.55 per share, compared with just $207 million in the first quarter. Adjusted earnings came in at $3.8 billion, or $9.41 per share, versus $200 million a quarter earlier.

 

“Second quarter results reflect the strength of our operations and value of our integrated portfolio,” said Mark Lashier, chairman and CEO of Phillips 66. “We remain committed to our strategic priorities and continuous improvement. Our focus on operating excellence, coupled with our commercial footprint, enables us to reliably supply energy products across the United States and to global consumers.

 

“Our capital allocation framework is an integral component of the investment opportunity of Phillips 66. We remain committed to creating value for our stakeholders through disciplined capital investment, dividends, share repurchases and debt reduction.”

 

The company also made significant progress on its balance sheet, cutting total debt by $6.6 billion to $20.6 billion and reducing net debt to $16.5 billion.

 

Operations delivered several milestones during the quarter. Phillips 66 achieved record NGL fractionation and LPG export volumes, while refining utilization reached a strong 96%, with clean product yield at 86%.

 

The company also completed successful turnarounds at its Wood River and Humber refineries and achieved full production at Dos Picos II, a 220 million cubic feet per day gas plant in the Permian Basin.

 

Phillips 66 announced plans to build the 300 million cubic feet per day Zeus Gas Plant in the Permian Basin, along with a 100,000-barrel-per-day Coastal Bend NGL Fractionator in Corpus Christi.

 

At Chevron Phillips Chemical Company LLC, the Golden Triangle Polymers Project in Orange, Texas, and the Ras Laffan Polymers Project in Qatar continued to advance, with full operations expected in 2027.

 

The company's second-quarter performance improved across nearly every major segment.

 

Midstream pre-tax income rose from the first quarter, driven primarily by higher margins and increased volumes. The comparison also benefited from the absence of impacts from Winter Storm Fern, which affected the previous quarter.

 

Chemicals adjusted pre-tax income increased on stronger margins, while Refining benefited from higher realized margins, rising market crack spreads and favorable mark-to-market impacts.

 

Marketing and Specialties also posted higher adjusted pre-tax income, helped by stronger global marketing margins and favorable mark-to-market impacts.

 

In Renewable Fuels, pre-tax income increased on higher regulatory credits stemming from stronger pricing and renewable fuels production, along with favorable mark-to-market impacts.

 

Corporate and Other posted a smaller pre-tax loss, primarily reflecting lower net interest expense and employee-related costs.

 

Phillips 66 ended the quarter with $4.1 billion in cash and cash equivalents and $6.4 billion of committed credit capacity available under its credit facilities.