Why Is Phillips 66 (PSX) Up 7.8% Since Last Earnings Report?

It has been about a month since the last earnings report for Phillips 66 (PSX). Shares have added about 7.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Phillips 66 due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Phillips 66 Q4 Earnings Top Estimates on Higher Realized Refining Margins

Phillips 66 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.

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%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -7.32% due to these changes.

VGM Scores

At this time, Phillips 66 has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Phillips 66 has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Phillips 66 is part of the Zacks Oil and Gas - Refining and Marketing industry. Over the past month, Valero Energy (VLO), a stock from the same industry, has gained 17.5%. The company reported its results for the quarter ended December 2025 more than a month ago.

Valero Energy reported revenues of $30.37 billion in the last reported quarter, representing a year-over-year change of -1.2%. EPS of $3.82 for the same period compares with $0.64 a year ago.

Valero Energy is expected to post earnings of $1.86 per share for the current quarter, representing a year-over-year change of +109%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Valero Energy. Also, the stock has a VGM Score of A.

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This article originally published on Zacks Investment Research (zacks.com).

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