Phillips 66 beats estimates on strong refining margins

Investing.com -- Phillips 66 (NYSE: PSX) reported third-quarter adjusted earnings of $14.08 per share, beating analyst estimates of $11.84 per share. The company posted adjusted earnings of $5.6 billion for the quarter, up from $3.8 billion in the second quarter of 2026.

The refining segment drove the strong performance, with adjusted pre-tax income of $6.1 billion, up from $3.1 billion in the prior quarter, primarily due to higher realized margins and volumes. The company achieved a realized refining margin of $38.00 per barrel, compared to $24.08 per barrel in the second quarter.

Refining utilization reached 98% with a record distillate yield of 41% and clean product yield of 86%. Shares rose 2% premarket following the results.

"Phillips 66 delivered strong operating performance in the third quarter and is executing on its financial and operating commitments," said Mark Lashier, chairman and CEO of Phillips 66. "Our integrated portfolio, commercial capabilities and focus on continuous improvement enable the company to create value for stakeholders."

The company returned $2.8 billion to shareholders during the quarter through $2.3 billion in share repurchases and $504 million in dividends. Phillips 66 reduced total debt by $2.0 billion to $18.5 billion and net debt by $3.8 billion to $12.7 billion.

The Midstream segment reported pre-tax income of $702 million, down from $785 million in the second quarter, mainly due to lower margins associated with gas transportation. The Chemicals segment earned $311 million, down from $404 million, primarily due to lower polyethylene margins.

Marketing and Specialties adjusted pre-tax income decreased to $245 million from $514 million in the prior quarter, driven by lower global marketing fuel margins. Renewable Fuels pre-tax income fell to $191 million from $544 million, mainly due to lower margins and higher costs.

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