Phillips 66 Q2 Earnings Hit $1.2B, Midstream Record

Phillips 66 reported second-quarter adjusted earnings of $1.1 billion, or $2.44 a share. Cash from operations was $1.8 billion. The company returned $756 million to shareholders through dividends and share repurchases, CFO Kevin Mitchell said on the call.

Refining EBITDA reached $1.7 billion, the highest since the third quarter of 2023. Margins were strong across all regions. The West Coast and Gulf Coast were particularly strong, executive Rich Harbison said, reflecting industry capacity constraints. The Rodeo renewable fuels facility in California reached full operations, producing renewable diesel, sustainable aviation fuel, and renewable gasoline.

Midstream set a record with $549 million in EBITDA, driven by higher NGL fractionation throughput at the Sweeny Hub and strong pipeline volumes, Don Baldridge said. The PSX stock page shows the company's integrated model in action.

CPChem, the chemicals joint venture, contributed $213 million. Polyethylene margins and volumes both improved. Marketing and other added $95 million. Renewables contributed $26 million.

Return on capital employed was 16% in the quarter, up from 14% over the trailing twelve months. Cash at quarter-end was $5.4 billion. Net debt to capital stood at 23%.

For the third quarter, Mitchell said crude runs should be roughly flat with the second quarter's 2.2 million barrels per day. Turnaround spending is expected at $500 million, keeping the full-year target of $1.3 billion unchanged.

The company raised its full-year gross capital spending guidance to $2.3 billion from $2.1 billion, reflecting additional investment in midstream and renewable fuels.

Operating cost savings have reached an annualized run rate of about $275 million. Mitchell said the company remains on track to hit its $500 million target by year-end.

Share repurchases totaled $450 million in the second quarter. The company increased its dividend in May.

CEO Mark Lashier said the results reflect the strength of the diversified portfolio. He said the company remains constructive on the refining environment for the second half.

Harbison said demand for refined products is steady, and supply constraints should keep margins supportive. The Rodeo facility is ramping as expected and should contribute meaningfully in the second half. Crude oil dynamics remain a key input for refining margins.

Baldridge said midstream investments are continuing, including additional fractionation capacity at the Sweeny Hub.

CPChem's improved margins should persist, Mitchell said. The buyback program has about $1.5 billion remaining under the current authorization.

Full-year gross capital spending is set at $2.3 billion. The $500 million cost-savings target by year-end is on track.