Phillips 66 (NYSE: PSX) announces third-quarter earnings of $1.6 billion and adjusted earnings of $1.9 billion. This compares with earnings of $1.0 billion and adjusted earnings of $1.5 billion in the third quarter of 2011.
“We had a solid quarter as a result of achieving strong utilization rates and running more advantaged feedstocks. We continue to focus on safe and reliable operations throughout the company,” said Greg Garland, Phillips 66 chairman and chief executive officer. “Our operating cash flow enabled us to return more than $235 million of capital to our shareholders.”
“Our participation in refining and marketing, midstream and chemicals creates unique potential for growth. Our portfolio provides us the opportunity to invest in high-value infrastructure, midstream and chemicals projects,” Garland added.
Refining and Marketing (R&M)
R&M generated earnings of $1,648 million during the third quarter, compared with $785 million a year ago. R&M adjusted earnings were $1,675 million, an increase of $414 million from the same period last year. Within R&M, Refining recorded earnings of $1,580 million, and Marketing, Specialties and Other generated $68 million.
Refining adjusted earnings were $568 million higher than a year ago largely as a result of improved refining margins. Average worldwide market crack spreads increased approximately 40 percent, and the company captured most of this improvement achieving a realized refining margin of $17.05 per barrel. In the Central Corridor region, the company’s realized refining margin was $31.83 per barrel, capturing 88 percent of the market crack spread. Compared with the same quarter last year, Phillips 66’s worldwide refining utilization increased from 92 percent to 96 percent, despite a three-week shutdown of the Alliance Refinery due to Hurricane Isaac.
The company has the capability to run lower-cost Canadian crudes and has access to multiple transportation systems to reliably deliver these crudes to its U.S. refineries. Additionally, the company is taking steps to process more advantaged crudes as part of its ongoing strategy to enhance returns. During the third quarter, 63 percent of the company’s U.S. crude slate was considered advantaged.