Summary
Phillips 66 (PSX) reported a decrease in earnings for 2019 compared to 2018, primarily due to lower refining and marketing margins, and an impairment charge related to its investment in DCP Midstream. Despite this, the company maintained a strong operational performance, with its refining segment achieving a high utilization rate of 94%. Phillips 66 continues to execute its strategic priorities focused on operating excellence, disciplined capital allocation for growth in midstream and chemicals, enhancing refining returns, and returning value to shareholders through dividends and share repurchases. The company is actively investing in midstream infrastructure, including pipelines and fractionation capacity, and its chemicals segment, through its joint venture CPChem, is progressing on significant petrochemical projects in the U.S. Gulf Coast and Qatar. Phillips 66 remains committed to shareholder returns, having increased its dividend for the seventh consecutive year and continuing its share repurchase program, signaling confidence in its financial stability and operational capabilities.
Financial Highlights
50 data points| Revenue | $107.29B |
| Cost of Revenue | $95.53B |
| Gross Profit | $11.76B |
| R&D Expenses | $54.00M |
| SG&A Expenses | $1.68B |
| Operating Income | $3.08B |
| Interest Expense | $504.00M |
| Net Income | $3.08B |
| EPS (Basic) | $6.80 |
| EPS (Diluted) | $6.77 |
| Shares Outstanding (Basic) | 451.36M |
| Shares Outstanding (Diluted) | 453.89M |
Key Highlights
- 1Earnings decreased by 45% in 2019 to $3.1 billion, primarily due to lower refining and marketing margins and an $853 million impairment on the DCP Midstream investment.
- 2The Midstream segment saw improved results from Transportation and NGL businesses, but overall pre-tax income decreased due to the DCP Midstream impairment.
- 3The Refining segment's pre-tax income significantly decreased in 2019, driven by lower realized refining margins, particularly due to narrowing heavy crude differentials.
- 4The Chemicals segment's pre-tax income declined due to lower polyethylene margins and inventory write-downs at CPChem.
- 5Phillips 66's Marketing and Specialties segment experienced a decrease in pre-tax income, mainly due to lower marketing fuel margins.
- 6The company generated $4.8 billion in cash from operating activities and returned $4.9 billion to shareholders through capital expenditures ($3.9 billion), share repurchases ($1.7 billion), and dividends ($1.6 billion).
- 7Significant capital expenditures were directed towards midstream growth projects, including pipeline expansions and fractionation capacity, and towards refining projects aimed at improving yields and reliability.