(Corrects headline and first two paragraphs to reflect rise in earnings.)
Phillips 66 (PSX), the largest U.S. refiner by market value, said first-quarter profit rose on a gain from selling its specialty products unit.
Net income climbed to $1.57 billion, or $2.67 a share, from $1.41 billion, or $2.23, a year earlier, the Houston-based company said in a statement on Business Wire today. Excluding one-time items, per-share profit exceeded the $1.35 average of 15 analysts’ estimates compiled by Bloomberg. Phillips 66, which was spun off from ConocoPhillips in 2012, agreed to sell Phillips Specialty Products Inc. to Berkshire Hathaway Inc. in December in exchange for shares held by the investment company.
The refiner raked in profits a year ago as the gap between West Texas Intermediate and Brent crude prices averaged $18.13 for the first three months of 2013. The spread narrowed to an average of $9.30 in the first quarter, according to data compiled by Bloomberg, as U.S. pipelines moved more oil to refineries.
With prices closer, the profit margin declined for fuel sales, since the company couldn’t reap the benefit of having a cheaper feedstock than international rivals. “Basically, it’s cheaper now to get the oil to the markets and now there is less of an economic reason to have that differential,” Rob Desai, an analyst for Edward Jones in St. Louis, said in a phone interview before the earnings were released.
The results were announced before the start of regular trading on U.S. markets. Phillips 66 fell 0.4 percent to $83.75 yesterday in New York. The shares have 13 buy and eight hold recommendations from analysts.
To contact the reporter on this story: Zain Shauk in Houston at email@example.com
To contact the editors responsible for this story: Susan Warren at firstname.lastname@example.org Tina Davis, Jasmina Kelemen