Phillips 66 posted a surprise first-quarter profit on Wednesday, driven by higher refining margins that defied analyst expectations of a loss. The company's adjusted earnings of $1.02 per share for the quarter ended March 31 exceeded the average analyst estimate of a loss of 15 cents per share, according to data compiled by Bloomberg.
Strong Refining Margins Boost Results
The U.S. oil refiner benefited from improved margins as global fuel demand remained resilient despite economic uncertainties. Phillips 66's refining segment reported a pre-tax income of $456 million, compared with a loss of $289 million in the same period last year. The company's utilization rate rose to 92% from 88% a year earlier.
Operational Highlights
Total revenue and other income fell to $32.4 billion from $34.8 billion a year earlier, reflecting lower crude oil prices. However, the company's refining margins averaged $14.26 per barrel, up from $8.72 per barrel in the first quarter of 2025. The results were also supported by strong performance in its chemicals and midstream businesses.
- Chemicals segment pre-tax income rose to $187 million from $102 million.
- Midstream segment pre-tax income increased to $345 million from $298 million.
- Marketing and specialties segment pre-tax income was $112 million, down from $134 million.
Outlook and Shareholder Returns
Phillips 66 said it expects second-quarter crude runs to be in the range of 1.8 million to 1.9 million barrels per day. The company also announced plans to increase its quarterly dividend by 5% to $1.05 per share and authorized an additional $2 billion in share repurchases. Shares of Phillips 66 rose 3.2% in afternoon trading following the earnings release.
The surprise profit comes amid a volatile period for the refining industry, with margins squeezed by high crude oil costs and uncertain demand outlook. Phillips 66's results contrast with some peers that have reported weaker earnings due to planned maintenance and lower margins.
