Shares of Phillips 66 (NYSE: PSX) saw a notable increase on Wednesday, propelled by the release of its fourth-quarter financial results that outperformed consensus estimates. Investors responded positively to the company's comprehensive earnings report, which highlighted both strong profitability and operational effectiveness.
In the quarter, Phillips 66 achieved adjusted earnings of $2.47 per share, comfortably surpassing the Wall Street consensus of $2.16 per share. On a Generally Accepted Accounting Principles (GAAP) basis, the company posted earnings of $2.9 billion, translating to $7.17 per share. These figures include a pre-tax charge of $239 million associated with accelerated depreciation taken at the Los Angeles Refinery. Revenue for the period totaled $36.3 billion, surpassing analysts’ estimates of $32.06 billion.
The company demonstrated solid cash flow generation during the quarter, with net operating cash flow amounting to $2.8 billion. When excluding the effects of changes in working capital, cash flow was $2.0 billion. Refining utilization proved robust, rising to 99%, while clean product yield reached 88%, reflecting efficient operations and strong market demand.
At the end of December 2025, Phillips 66 maintained a cash and cash equivalent balance of $1.1 billion alongside $5.7 billion in available capacity on its committed credit facilities, underscoring a healthy liquidity position.
Segment-Level Results
Segment performance varied throughout the fourth quarter. Midstream operations experienced an increase in adjusted pre-tax income on a sequential basis, primarily driven by elevated volumes. Conversely, the Chemicals segment saw a sequential decrease in adjusted pre-tax income, mainly attributable to narrower margins during the period.
The Refining division's adjusted pre-tax income benefited from strategic acquisition and subsequent consolidation of the remaining interest in WRB Refining LP, contributing positively to the segment's financials. However, Marketing and Specialties recorded a sequential decline in adjusted pre-tax income, largely influenced by the partial divestiture of its Germany and Austria retail marketing businesses, coupled with softer domestic margins.
Within Renewable Fuels, sequential improvement in pre-tax income was observed, partly due to higher realized margins including inventory effects. Nevertheless, the impact of reduced credits exerted some downward pressure on results.
Outlook and Market Reaction
Looking ahead to the first quarter of fiscal year 2026, Phillips 66 expects global utilization rates for olefins and polyolefins in midstream operations to be in the mid-90% range. Refining crude utilization is projected to be in the low-90% range, indicating continued strong operational activity.
At the time of publication, Phillips 66 shares were trading up by 3.81% at $153.72, marking a new 52-week high according to market data. This increase highlights investor confidence in the company's recent performance and growth prospects.