Phillips 66
CEO : Mr. Mark E. Lashier
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | 41.1% YoY | 55.0% | 28.6% | 2023-01-31 |
Kevin Mitchell says,
Financial Results
- Adjusted earnings were $8.9 billion or $18.79 per share for the year, with fair value of investment in NOVONIX reducing earnings per share by $0.71.
- Operating cash flow was $10.8 billion, cash distributions from equity affiliates were $1.7 billion, and net debt-to-capital ratio was 24% at the end of 2022.
- Adjusted earnings were $1.9 billion or $4 per share for the fourth quarter, with fair value of investment in NOVONIX reducing earnings per share by $0.02.
- Capital spending for the quarter was $713 million, including $310 million for growth projects.
- Returned $1.2 billion to shareholders through $456 million of dividends and $753 million of share repurchases.
Midstream and Chemicals Results
- Fourth quarter adjusted pretax income for Midstream was $674 million, with Transportation contributing to pretax income of $237 million and NGL and Other adjusted pretax income of $448 million.
- Chemicals had fourth quarter adjusted pretax income of $52 million, mainly due to lower margins and volumes.
Refining Results
- Refining had fourth quarter adjusted pretax income of $1.6 billion, primarily due to lower realized margins. Realized margins decreased by 27% to $19.73 per barrel, while the composite 3 to 1 re-adjusted market crack decreased by 16%.
- Market capture was 84%, compared to 95% in the previous quarter.
- Refining turnaround expenses were $236 million in the fourth quarter, with expected expenses between $240 million and $270 million for the first quarter of 2023 and between $550 million and $600 million for the full year.
Financial Outlook
- Corporate and Other costs are expected to come in between $230 million and $260 million for the first quarter and in the range of $1 billion to $1.1 billion for the full year.
- Full year D&A is expected to be about $2 billion, and the effective income tax rate to be between 20% and 25%.
- The company expects to spend $310 million on growth projects, indicating a strong focus on growth and guidance for the future.
Tim Roberts says,
Expected Cost of $300 million to Capture Opportunities
- The company expects to see an expense of $300 million in the coming years to capture the opportunities in the market.
- It is estimated that around one third of the cost will be spent in the near future.
Commercial Side is Driving Growth
- Initial indications suggest that the commercial side of the business is likely to drive growth.
- The company foresees that it will take around two years to fully capture the growth.
Integration of Value Chain
- The company has integrated gas processing and fractionation capacity in key regions.
- Long-haul pipelines coming in and out of DJ and Permian are creating opportunities to place the barrel at the right place for maximum value.
Possible Additional Opportunities
- The company is hoping to find more opportunities as it digs deeper into the integration process.
- They plan to update investors on any new developments in the future.
Q & A sessions,
Expected Earnings and Cash Position
- The company achieved the high end of the range in Q4 2022 earnings
- Expectations to maintain earnings around that level
- Healthy cash position at the end of the year, over $6 billion
- Enhanced balance sheet by $4 billion since pre-pandemic
DCP Roll-Up and Impact on Debt and Dividend
- DCP roll-up expected sometime in Q2
- Transaction valued at $3.8 billion
- Expect to pay off incremental debt and increase dividends
- Flexibility to look at cash returns to shareholders, including potential buybacks
Structure Simplification and Industry Consolidation
- PSXP and DCP will simplify overall ownership structure
- Market evolving with consolidation in the industry
- Opportunities will be assessed, but focus is on successfully integrating DCP
- Expect DCP integration to take until end of 2022 or possibly 2024
No bad stock 