Phillips 66's First Earnings Report Is a Profitable One
HOUSTON -- Phillips 66's first earnings report as an independent company was a memorable one.
The company, whose fuel brands appear on more than 1,000 U.S. convenience stores and gas stations, said it earned $1.4 billion for its 2012 fiscal second quarter. That compares to a $1-billion net profit the division, then under ConocoPhillips, achieved in its 2011 second quarter.
"We're off to a solid start [as an independent company]," Phillips 66 CEO Greg Garland said during the company's earnings conference call today. "The spin[off] transaction was executed flawlessly."
Three months ago today, Phillips 66 was officially spun off from ConocoPhillips Inc. According to Garland, the transition to the new company has been seamless. "We operated with excellence and everything ran well," the chief executive said. "We have a clear strategy for growth."
Broken down further, Phillips 66's refining and marketing division earned a net profit of $882 million in its 2012 second quarter, vs. $498 million in the same period a year ago.
Its marketing, specialties and other subdivision, home to its U.S. wholesale marketing business, also saw profits rise to $302 million, compared to $276 million in 2011's second quarter.
Phillips 66's board of directors was so pleased with the earnings results that the company declared during the call that it would repurchase up to $1 billion worth of its shares. The company said it would not disclose a date regarding when it would complete the share repurchase, but Garland noted it "would not sit on its hands," and will be "active on the [open] market."
According to CFO Greg Maxwell, the company holds $19 billion in equity and has $8 billion in debt. Garland also stated on the earnings call that Phillips 66 is "not resistant" to spinning off some of its midstream assets into a master limited partnership (MLP). He added that he would provide much more information about that topic during a December analyst meeting.