Phillips 66 reported a smaller-than-expected adjusted loss for the fourth quarter of 2024, aided by a profit from its renewable fuels division. Refining margins continued to decline, but the company outlined plans to prioritize shareholder returns.
Phillips 66 reported a fourth-quarter loss as expected, but the magnitude was smaller than analyst forecasts. This was attributed to the company's renewable fuels division generating a profit in the last quarter of 2024. Phillips 66 recorded an adjusted loss of $61 million, or $0.15 per share, for the fourth quarter, a significant drop from the $859 million earnings in the third quarter. The Q4 loss of $0.15 per share narrowly beat the average analyst estimate of $0.
23 per share compiled by LSEG. Throughout the fourth quarter, refining margins continued their downward trend, leading to a further decline in Phillips 66's realized refining margins per barrel, which fell to $6.08 in the fourth quarter compared to $8.31 in the previous quarter. This marked more than a halving from the $13.88 per barrel achieved in the fourth quarter of 2023. Consequently, the refining division's adjusted loss widened to $759 million from a loss of $67 million in the third quarter. However, the renewable fuels segment reversed course, posting an adjusted profit of $28 million in Q4, a stark contrast to the $116 million loss recorded in the previous quarter.Despite these losses, Phillips 66 announced its next phase of priorities through 2027, emphasizing shareholder returns by returning more than 50% of operating cash flow to shareholders. This announcement follows another refining giant, Valero Energy, reporting higher-than-expected earnings for the fourth quarter, defying widespread predictions of a profit slump for the last quarter of 2024 and the full year. The U.S. and global fuel markets began to normalize in the latter half of 2023, with refining margins easing from their record highs witnessed immediately after the Russian invasion of Ukraine. U.S. refiners experienced a slump in refining margins to multi-year lows due to subdued fuel demand and increased global fuel supply. The refining industry is currently transitioning from the supercycle of extraordinary profits and record margins that began with the post-pandemic surge in demand and the war- and sanctions-related supply disruptions
Phillips 66 Refining Margins Renewable Fuels Q4 Earnings Shareholder Returns
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