US-based Phillips 66 reported adjusted earnings of $2.38 per share for the second quarter, significantly above analysts’ average estimate of $1.71. The performance was supported by stronger refining margins and a substantial drop in scheduled maintenance spending at its units.
Rising margins and improved operational performance
The company’s realised margin per barrel of crude oil rose by 12.4 % year-on-year to $11.25. Refining capacity utilisation reached 98 %, the highest level since 2018. Simultaneously, turnaround expenses decreased by 47 %, amounting to $53mn.
The refining segment posted adjusted earnings of $392mn during the quarter, up nearly 30 % compared to the same period last year. The group’s management attributed the improvement to favourable market capture and a record year-to-date yield in clean finished products.
Favourable sector dynamics and ongoing restructuring
The rebound in diesel and other petroleum product margins enabled several major refiners to exceed market expectations, in a context of normalisation following peak profitability in 2022. Phillips 66 benefitted from sustained demand and positive momentum in the North American markets.
The quarter also saw the resolution of a strategic standoff between the group and activist investor Elliott Investment Management, which secured two board seats during the annual shareholders meeting. Elliott had advocated for partial asset divestments or a strategic refocus on core refining activities, suggesting disengagement from less essential assets.
Mixed results across other segments
Adjusted earnings from the midstream segment — which includes transportation and logistics activities — declined by 3 % to $731mn. This drop contrasts with the performance of the refining division, highlighting the varied dynamics across the company’s portfolio.
In pre-market trading, Phillips 66 shares rose by approximately 1 %, reaching $125.50, supported by what was seen as strong results and tighter operational control.
