Phillips 66 (NYSE:PSX) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Phillips 66 (NYSE:PSX) is scheduled to report Q3 earnings results on October 30, 2020.

The company is expected to report earnings of -$0.75/share on revenue of $17.151 billion. The consensus earnings per share (EPS) of -$0.75/share is based on a poll of 17 analysts and represents a decline in eps of −124.1% over the same quarter last year, when the company reported earnings of $3.11/share.

The revenue forecast of $17.151 billion based on a poll of 5 analysts implies a year-over-year (YoY) decline in revenue of −38.2%. Last year the company reported $27.771 billion in revenue for the quarter.

Expected to report EPS of -$0.75/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $17,151.19 $27,771.00 −38.2%
EPS -$0.75 $3.11 −124.1%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarter.

What are your expectations from Phillips 66 for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.84 -$0.74 11.7% Beat
Q1, 2020 $0.63 $1.02 60.9% Beat
Q4, 2019 $1.64 $1.54 −6.1% Missed
Q3, 2019 $2.60 $3.11 19.6% Beat
Q2, 2019 $2.72 $3.02 11.0% Beat
Q1, 2019 $0.34 $0.40 16.0% Beat
Q4, 2018 $2.89 $4.87 68.7% Beat
Q3, 2018 $2.47 $3.10 25.7% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −1.7%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 31, 2020 $63.09 $62.02 −1.7% Decline
May 1, 2020 $73.17 $66.36 −9.3% Decline
January 31, 2020 $96.41 $91.37 −5.2% Decline
October 25, 2019 $110.63 $114.42 3.4% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.29, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.29 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Phillips 66 is currently trading at $48.14/share, down −4.6% for the day. The company is trading at approximately 40.1% of its 52-week high of $119.92/share. The company’s stock price is down −22.4% since the last earnings report and down −2.9% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 36.48 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:PSX Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −17.58 and a forward P/E multiple of −160.21.

Phillips 66’s current share price also implies a price-to-book (P/B) multiple of 1.01. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $48.14
P/E Ratio −17.6x
P/E Ratio (Fwd) −160.2x
PEG Ratio 0.1
Total Debt / Total Capital 37.0%
Levered Free Cash Flow $330 million
EV / EBITDA 7.3x

Finbox

Phillips 66 is a large-cap stock with a market capitalization of $21.023 billion and a total enterprise value of $36.159 billion. The company operates in the Energy sector and the Oil, Gas & Consumable Fuels industry.

Phillips 66 operates as an energy manufacturing and logistics company. It operates through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). The Midstream segment transports crude oil and other feedstocks; delivers refined products to market; provides terminaling and storage services for crude oil and petroleum products; transports, stores, fractionates, exports, and markets natural gas liquids; provides other fee-based processing services; and gathers, processes, transports, and markets natural gas. The Chemicals segment manufactures and markets ethylene and other olefin products; aromatics and styrenics products, such as benzene, cyclohexane, styrene, and polystyrene; and various specialty chemical products, including organosulfur chemicals, solvents, catalysts, and chemicals used in drilling and mining. The Refining segment refines crude oil and other feedstocks into petroleum products comprising gasolines, distillates, and aviation fuels at 13 refineries in the United States and Europe. The M&S segment purchases for resale and markets refined petroleum products consisting of gasolines, distillates, and aviation fuels primarily in the United States and Europe. It also manufactures and markets specialty products, such as petroleum coke products, waxes, solvents, and polypropylene. Phillips 66 was founded in 1875 and is headquartered in Houston, Texas.

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