Phillips 66 Q4 Earnings Top Estimates on Higher Realized Refining Margins

Phillips 66 PSX reported fourth-quarter 2025 adjusted earnings of $2.47 per share, which beat the Zacks Consensus Estimate of $2.11. The bottom line also improved from the year-ago quarter’s adjusted loss of 15 cents per share.

Total quarterly revenues of $36.3 billion beat the Zacks Consensus Estimate of $30.2 billion. However, the top line improved from the year-ago level of $34 billion.

The strong quarterly results can be primarily attributed to higher realized refining margins worldwide and increased contributions from the midstream segment.

Phillips 66 Price, Consensus and EPS Surprise

Phillips 66 price-consensus-eps-surprise-chart | Phillips 66 Quote

Segmental Results

Midstream:

The segment generated adjusted pre-tax quarterly earnings of $717 million, higher than $708 million in the year-ago quarter. The segment primarily benefited from higher volumes.

Chemicals:

The unit reported adjusted pre-tax earnings of $19 million, reflecting a decline from $72 million in the prior-year quarter. The segment was mainly impacted by weaker margins in the reported quarter.

Refining:

The segment reported adjusted pre-tax earnings of $542 million, reversing from a loss of $759 million in the year-ago quarter. The improvement can be attributed to higher realized refining margins worldwide. The segment also benefited from the acquisition and consolidation of its remaining interest in WRB Refining.

Realized refining margins worldwide increased to $12.48 per barrel from the year-ago quarter’s $6.08. In the Central Corridor and Gulf Coast, margins increased to $13.06 and $12.48 per barrel from the year-ago quarter’s $6.68 and $5.58, respectively.

The West Coast’s margins improved to $8.85 per barrel from $5.74 in the year-ago quarter. In the Atlantic Basin/Europe, the metric increased to $12.60 per barrel from $6.09 a year ago.

Marketing & Specialties:

Adjusted pre-tax earnings declined to $439 million from $185 million in the year-ago quarter. The segment benefited from higher realized marketing fuel margins per barrel.

Realized marketing fuel margins in the United States improved to $1.55 per barrel from the year-ago quarter’s figure of $1.18, while margins in the international markets went up to $5 per barrel from $3.70 a year ago.

Renewable Fuels:

The segment reported an adjusted pre-tax loss of $19 million, lower than the adjusted pre-tax earnings of $28 million in the year-ago quarter.

Costs & Expenses

Total costs and expenses in the fourth quarter decreased to $32.9 billion from $34 billion in the year-ago period. This was primarily due to a decline in purchased crude oil and products.

Financial Condition

Phillips 66 generated $2.75 billion in net cash from operations in the reported quarter, an increase from $1.2 billion in the year-ago period. The company’s capital expenditure and investments totaled $682 million. It paid out dividends of $482 million in the reported quarter.

As of Dec. 31, 2025, cash and cash equivalents were $1.1 billion. Total debt was $19.7 billion, reflecting a debt-to-capitalization of 39%.

PSX’s Zacks Rank and Key Picks

PSX currently carries a Zacks Rank #3 (Hold).

Some top-ranked stocks from the energy sector are Oceaneering International OII, W&T Offshore WTI and Archrock Inc. AROC, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. The company is a leading provider of offshore equipment and technology solutions to the energy industry. OII’s proven ability to deliver innovative, integrated solutions supports ongoing client retention and new business opportunities, ensuring steady revenue growth.

W&T Offshore benefits from its prolific Gulf of America assets, which offer low decline rates, strong permeability and significant untapped reserves. The company’s recent acquisition of six shallow-water fields in the Gulf of America boosts its production prospects in the future, which is expected to enhance its revenues. 

Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues. With natural gas playing an increasingly important role in the energy transition journey, AROC is expected to witness sustained demand for its services.

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