(Reuters) – Phillips 66 (NYSE:) beat quarterly profit estimates on Tuesday, as strength in its chemicals and midstream segments helped the refiner more than offset a drop in refining margins due to lackluster demand for fuel.
The company, which owns nearly 72,000 miles of pipeline systems in the United States, has moved more fuel this year than ever before as it expands its share of the liquids market.
Super-chilled fuel volumes moved through its pipelines rose to 2.79 million barrels per day in the first nine months of 2024, compared to 2.70 million bpd in 2023.
The company's third-quarter adjusted profit rose 15.6% from a year earlier, also helped by a more than threefold increase in adjusted profit in its chemicals segment to $342 million and a drop in 4.7% in expenses.
However, its refining segment was hit by a drop in realized margins, driven by lower crack spreads, which fell to $8.31 per barrel in the quarter from $19.06 per barrel.
The company's shares fell nearly 2.2% in morning trading.
US refinery margins, as measured by the 3-2-1 crack spread, fell to $14.28 in mid-September, the lowest level since early 2021.
Globally, refineries have seen a drop in profitability due to weak industrial and consumer demand, especially in China. British energy giant BP (NYSE:) today reported a drop in third-quarter profits due to weaker refining margins and a slowdown in oil demand.
Phillips 66's third-quarter adjusted profit was $2.04 per share, well above analysts' average estimate of $1.66, according to data compiled by LSEG.
!function(f,b,e,v,n,t,s){if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)};if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;n.queue=();t=b.createElement(e);t.async=!0;t.src=v;s=b.getElementsByTagName(e)(0);s.parentNode.insertBefore(t,s)}(window, document,’script’,’https://connect.facebook.net/en_US/fbevents.js’);
