The Phillips 66 company achieved better-than-forecasted second-quarter earnings results because of increased refining profit margins and decreased maintenance expenses which allowed the American fuel manufacturer to recover from its challenging first quarter.
The refining unit of the company achieved a 30% increase in adjusted earnings which reached $392 million while refining margins per barrel increased by 12.4% to $11.25 year-over-year. The company achieved its highest crude utilization rate at 98% since 2018 while turnaround expenses decreased by almost 50% to $53 million.
CEO Mark Lashier stated that improved operations together with record clean product yields and cost efficiency led to the company’s positive performance. The market saw similar performance gains from Valero as well as other competitors who experienced stronger diesel margins during this quarter.
The chemicals segment of Phillips 66 showed weakness while the midstream division recorded a 3% decrease in adjusted earnings which reached $731 million. The refining and marketing sector performed well according to analysts but they expressed worries about debt levels because the company continues to build its midstream infrastructure.
The company released its financial results following a disputed board election in May where activist investor Elliott Investment Management gained two board seats. The company faces pressure from Elliott to separate its midstream operations while concentrating on refining activities.
The previous quarter resulted in a Phillips 66 loss because of turnaround activities. The current financial performance gives investors confidence because the company continues its efforts to meet shareholder requirements for operational optimization and value generation.
