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UPDATE 2-Phillips 66's profit misses on lower refining margins
February 3, 2017 / 12:37 PM / a year ago

UPDATE 2-Phillips 66's profit misses on lower refining margins

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Feb 3 (Reuters) - U.S. independent oil refiner Phillips 66 posted a lower-than-expected quarterly profit as margins were squeezed by the narrowing gap between prices of U.S. crude and refined products.

The company’s shares were down 1 percent at $80.20 in premarket trading on Friday.

U.S. refiners, which were facing pricing pressure due to a glut of refined products, are now being challenged by a rise in crude prices.

Phillips’ worldwide realized refining margins fell 31.2 percent to $6.47 in the fourth quarter. Smaller rival Valero Energy Corp, which reported fourth-quarter results on Tuesday, also reported a 24.4 percent drop in refining throughput margin to $8.22.

Phillips posted an adjusted loss from its refining business of $95 million in the fourth quarter ended Dec. 31, compared with adjusted earnings of $376 million a year earlier.

Refining margins were also hurt by higher costs and lower volumes due to maintenance-related activities, Phillips said.

Phillips’ worldwide crude utilization rate was 93 percent, down from 97 percent in the third quarter.

Consolidated earnings fell to $163 million, or 31 cents per share, in the quarter from $650 million, or $1.20 per share, a year earlier.

The company reported adjusted earnings of 16 cents per share, well below analysts’ average estimate of 40 cents, according to Thomson Reuters I/B/E/S.

Total revenue and other income rose 7.4 percent to $23.67 billion, beating analysts’ estimate of $22.50 billion. (Reporting by Arathy S Nair in Bengaluru; Editing by Anil D‘Silva)

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