Cheaper Crude Helps Phillips 66 Double Quarterly Profit
U.S. refiner Phillips 66 said on Wednesday that first-quarter earnings more than doubled as it used cheaper American- and Canadian-produced crude oil to make gasoline and other fuels.
The company, which operates 15 refineries and has a large chemical business, said most of its crude came from Alberta's oil sands as well as the Eagle Ford shale field in Texas and the Mississippian Lime shale in Oklahoma.
Using locally produced crude rather than importing from overseas, refiners keep costs low and margins high. Phillips 66 said profit in its refining unit jumped to $922 million in the quarter from $393 million a year earlier.
Chief Executive Officer Greg Garland said the strong results should help the company increase dividends and stock buybacks, which remain a "key component" of corporate strategy.
The Houston-based company reported first-quarter earnings of $1.41 billion, or $2.23 per share.
Comparable profit for the year-earlier period was $636 million, or $1.00 per share. Phillips 66 was split off from ConocoPhillips in May 2012 and not independent in the first quarter of that year.
Excluding one-time items, the company earned $2.19 per share in the latest quarter. By that measure, analysts expected $1.89, according to Thomson Reuters I/B/E/S.
On Tuesday, Phillips 66's refining peers, Valero Energy and Marathon Petroleum, reported higher-than-expected profits, also helped by cheap domestic crude oil.