Phillips 66 shares slid the most since August after the company posted a 61 percent drop in first-quarter earnings due to smaller profit margins for refining and chemicals production.
The stock fell as much as 7.6 percent, the most intraday since Aug. 24. Shares were down 5.6 percent to $82.91 at 1:06 p.m. in New York.
Driving the lower earnings was a plunge in revenue from the company’s refining business. Earnings for the refining segment, excluding one-time items, were $86 million, down from $376 million in the previous quarter, amid lower gasoline and distillate margins globally.
"Weaker margins impacted our financial results in the first quarter," said Greg Garland, chairman and Chief Executive Officer of Phillips 66. "We successfully completed planned turnarounds and accelerated some maintenance activities in the low margin environment.”
Phillips 66 expects strong summer gasoline demand and sees good gasoline fundamentals for the rest of the year, executives said on a conference call to discuss results. The company expects gasoline yields to range between 43 percent and 45 percent.
Crack spreads, or the difference between the cost of oil and the price of refined products, were $10.64 per barrel, 17 percent lower in the first quarter than in the previous quarter. The Midwest, Southwest and West Coast were particularly weak, with spreads falling there by 24 percent to 26 percent, the company said.
The company’s net income for the first quarter fell to $385 million, or 72 cents a share, from $987 million, or $1.79, a year earlier, the Houston-based company said in a Friday statement.