Phillips 66 Reports 10% Decrease in Sales and 83% Decline in Net Income for Q3 2024

For the third quarter ended September 30, 2024, Phillips 66 reported consolidated sales and other operating revenues of $35,528 million, a decrease of 10% from $39,643 million in the same period of 2023. Total revenues and other income also fell to $36,163 million from $40,322 million year-over-year. The company's total costs and expenses decreased to $35,750 million from $37,509 million, contributing to a significant decline in profitability. Income before income taxes dropped to $413 million from $2,813 million, while net income fell to $369 million compared to $2,143 million in the prior year. Net income attributable to Phillips 66 was $346 million, down from $2,097 million, resulting in earnings per share of $0.82, down from $4.72.

For the nine months ended September 30, 2024, net income was $2,150 million, a sharp decline from $5,954 million in the same period of 2023. Comprehensive income for the same period was $2,291 million, down from $6,029 million. The decrease in profitability was primarily attributed to lower refining margins and a $605 million litigation accrual related to a jury verdict against the company in the Propel Fuels case.

Phillips 66's strategic developments included the acquisition of Pinnacle Midland Parent LLC for $567 million on July 1, 2024, and the completion of the DCP Midstream merger in June 2023, which increased its economic interest in DCP LP from 43.3% to 86.8%. The company also announced plans to cease operations at its Los Angeles Refinery by the fourth quarter of 2025, with associated accelerated depreciation and severance costs.

The company’s cash and cash equivalents decreased to $1,637 million as of September 30, 2024, down from $3,323 million at the end of 2023. Total assets were reported at $75,080 million, slightly down from $75,501 million. Long-term debt increased to $18,476 million from $17,877 million, while total liabilities rose to $45,296 million from $43,851 million.

In terms of segment performance, the Midstream segment reported income before income taxes of $644 million, down from $1,965 million in Q3 2023. The Chemicals segment saw an increase in income to $342 million, while the Refining segment reported a loss of $108 million, a significant decline from $1,712 million in the previous year. The Marketing and Specialties segment also experienced a decrease in results, primarily due to the litigation accrual.

Overall, Phillips 66's financial performance in Q3 2024 reflects significant challenges, particularly in refining margins and legal liabilities, alongside strategic acquisitions aimed at enhancing its operational footprint.