February 11, 2019 [Bloomberg News] - Oil refinery and energy production company Phillips 66 co. (PSX - Get Report) on Friday reported better-than-expected fourth-quarter profit amid stronger refining margins.
Adjusted earnings in the quarter were $4.87 a share. Analysts surveyed by Zacks Investment Research had been anticipating per-share earnings of $2.76.
Its realized refining margins – a strong proxy of financial performance – rose to $16.53 a barrel in the fourth quarter, up from $8.98 per barrel a year earlier. The company’s worldwide crude utilization rate, another gauge of the company’s efficiency, reached 99%.
For the full year, the company earned $5.55 billion, or $11.71 a share, vs. $2.26 billion, or $4.38 a share, in 2017. The Houston-based company also gained $2.74 billion from the implementation of U.S. tax law changes in 2017.
During the fourth quarter, the company added 1.3 million barrels of crude oil storage at its Beaumont Terminal, bringing total crude and products storage capacity to 14.6 million barrels. A further expansion of 2.2 million barrels of crude oil storage is planned for completion in the first quarter of 2020, the company said.
Shares of Phillips 66 closed Friday up $1.78, or 1.94%, at $93.52 on the New York Stock Exchange. They ended the day Thursday down $2.68.
“We prefer British Petroleum (BP – Get Report) in the energy space for its ~5.80% dividend yield that is supported with growing cash flows,” said Action Alert Plus senior portfolio analyst Jeff Marks. “The strong downstream numbers from PSX follow the positive results from the downstream operations at BP, who reported a high-quality earnings beat earlier this week.
Phillips 66 processes, transports, stores and markets fuels and products globally. As of the end of December, Phillips 66 had assets of $54 billion.
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