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Phillips 66 (PSX) to Report Q1 Earnings: What to Expect?

Zacks Equity Research
·4-min read

Phillips 66 PSX is set to report first-quarter 2023 results on May 3, before the opening bell.

In the last reported quarter, the diversified energy manufacturing and logistics company’s adjusted earnings of $4 per share missed the Zacks Consensus Estimate of $4.34, owing to lower contributions from the Chemicals segment. The negatives were partially offset by strong refining margins worldwide.

In the trailing four quarters, Phillips 66 beat the Zacks Consensus Estimate for earnings thrice and missed the same once, delivering an earnings surprise of 13%, on average.

Phillips 66 Price and EPS Surprise

 

Phillips 66 Price and EPS Surprise
Phillips 66 Price and EPS Surprise

Phillips 66 price-eps-surprise | Phillips 66 Quote

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Let’s see how things have shaped up prior to the announcement.

Estimate Trend

The Zacks Consensus Estimate for Phillips 66’s first-quarter earnings per share of $3.59 has witnessed two upward revisions and three downward movements in the past 30 days. The consensus estimate suggests a year-over-year rise of 172%.

The Zacks Consensus Estimate for the to-be-reported quarter’s revenues of $29.8 billion indicates a 19% decline from the year-ago reported figure.

Factors to Note

In the March-end quarter of 2023, the demand for refined petroleum products improved significantly due to continued growth in fuel consumption. Being one of the world’s largest refiners, Phillips 66 is likely to have benefitted from higher demand for its refined petroleum products in the to-be-reported quarter.

The company is expected to have reaped the rewards of a better macro environment in its downstream business. As such, the Zacks Consensus Estimate for realized refining margin on a worldwide basis is pegged at $20.14 per barrel, indicating an increase from the year-ago reported level of $10.55 per barrel. This is likely to have positioned Phillips 66 for huge profits in the to-be-reported quarter.

Although crude prices were high in the first quarter, the same retreated from their peaks in the year-ago quarter. Hence, sustained lower crude prices are likely to have had a relatively negative effect on Phillips 66’s refining margins. This is expected to have affected PSX’s performance in the to-be-reported quarter.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Phillips 66 this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. As you can see, that is not the case here.

Earnings ESP: Phillips 66 has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate both are currently pegged at earnings of $3.59 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Phillips 66 currently carries a Zacks Rank #3.

Stocks That Warrant a Look

Here are some companies from the Energy space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

Cheniere Energy Inc. LNG currently has an Earnings ESP of +11.35% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cheniere Energy is scheduled to release first-quarter earnings on May 2. The Zacks Consensus Estimate for LNG’s earnings is pegged at $5.96 per share, suggesting a decline from the prior-year reported figure.

Magellan Midstream Partners LP MMP has an Earnings ESP of +0.70% and is currently a Zacks #3 Ranked player.

Magellan Midstream is scheduled to release first-quarter results on May 04. The Zacks Consensus Estimate for its earnings is pegged at $1.21 per share, suggesting an increase from the prior-year reported figure.

PBF Energy Inc. PBF has an Earnings ESP of +3.50% and a Zacks Rank #3 at present.

PBF Energy is scheduled to release first-quarter earnings on May 5. The Zacks Consensus Estimate for PBF’s earnings is pegged at $2.46 per share, suggesting an increase from the prior-year reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Magellan Midstream Partners, L.P. (MMP) : Free Stock Analysis Report

Cheniere Energy, Inc. (LNG) : Free Stock Analysis Report

Phillips 66 (PSX) : Free Stock Analysis Report

PBF Energy Inc. (PBF) : Free Stock Analysis Report

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Zacks Investment Research