Why Petroleum Refineries Major Phillips 66 Shares Are Falling Today
Portfolio Pulse from Lekha Gupta
Phillips 66 (NYSE:PSX) shares fell after reporting Q1 FY24 results with revenue beating expectations at $36.436 billion but adjusted EPS missing at $1.90 versus the $2.17 consensus. The company saw mixed performance across its segments, with a notable decline in the Refining segment's adjusted pre-tax income to $228 million from $797 million in the previous quarter. Operating cash flow was $1.2 billion, excluding working capital impacts. Phillips 66 also continued its shareholder distributions, projecting $13 billion to $15 billion by 2024, and achieved $1.2 billion in run-rate cost and capital reductions.
April 26, 2024 | 2:32 pm
News sentiment analysis
Sort by:
Descending
NEUTRAL IMPACT
VanEck Oil Refiners ETF (CRAK), which includes Phillips 66, may face short-term impacts from PSX's mixed Q1 FY24 earnings. The decline in PSX's Refining segment could particularly influence CRAK given its focus on the refining sector.
CRAK's focus on the oil refining sector means Phillips 66's performance, especially the notable decline in its Refining segment's income, could have a more pronounced short-term impact on the ETF. However, the overall effect will depend on the performance of other holdings within the ETF.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 60
NEUTRAL IMPACT
Investors in the iShares U.S. Oil & Gas Exploration & Production ETF (IEO) are exposed to Phillips 66, which reported mixed Q1 FY24 results. The ETF may see short-term impact due to PSX's performance, as it is part of the ETF's holdings.
Given that IEO includes Phillips 66 in its holdings, the ETF could experience indirect short-term impacts from PSX's earnings report. However, the diversified nature of ETFs means the effect might be mitigated by the performance of other holdings.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Phillips 66 reported mixed Q1 FY24 results with higher revenue but lower EPS than expected, leading to a 3.7% drop in share price. The significant decline in the Refining segment's income and the ongoing shareholder distributions highlight the company's financial strategies and operational challenges.
The drop in Phillips 66's share price is directly related to its Q1 FY24 earnings report, where it missed EPS expectations despite beating revenue forecasts. The significant decline in the Refining segment's income is a critical factor, indicating operational challenges that could impact future profitability. The ongoing commitment to shareholder distributions despite these challenges may also affect investor sentiment.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100