(Reuters) -Phillips 66 missed quarterly profit estimates dueto a decline in refining margins led by underperformance at its Gulf Coast operations, sending the refiner’s shares down 5.5% in premarket trading on Friday.
Refiner margins have scaled back from the peaks achieved after Russia’s invasion of Ukraine in 2022, amid a rise in global refining capacity that has led to a drop in fuel prices.
The company said its realized margins fell about 47% to $10.91 per barrel in the first quarter from a year earlier, led by nearly a 50% decline in Gulf Coast margins.
Its market capture, a measure of refining profit compared with industry benchmarks, fell to 69% from 93%.
The decline comes amid a push from activist investor Elliott, which revealed a $1 billion stake in the company last year, to address underperformance in refining and speed up cost cuts.
“Our results were affected by maintenance that limited our ability to make higher-value products. We were also impacted by the renewable fuels conversion at Rodeo, as well as the effect of rising commodity prices on our inventory hedge positions,” CEO Mark Lashier said.
Its crude capacity utilization stood at 92%, higher than last year.
Lashier added that the heavy maintenance it saw in the first quarter was largely complete.
Phillips 66 said it has launched a sales process of its retail marketing business in Germany and Austria as part of its plan to divest non-core assets of about $3 billion.
The Houston-based company reported adjusted earnings of $1.90 per share for the three months ended March 31, compared with analysts’ estimates of $2.17 per share, according to LSEG data.
(Reporting by Sourasis Bose in Bengaluru; Editing by Shounak Dasgupta and Shinjini Ganguli)
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