HOUSTON (AP) — THE NEWS: Third-quarter profit at Phillips 66 fell by two-thirds as the company struggled with lower margins on refining.
THE DETAILS: The company's core refining business went from earning $1.5 billion a year ago to a loss of $2 million in the third quarter. Refining had produced $1.4 billion in profit during the first half of this year, making the slowdown even more dramatic. Phillips blamed the downturn on a 40 percent reduction in the so-called crack spread, the difference between what it pays for crude oil and the price it gets for refined products. The refining results were partly offset by better profit in the chemicals business.
THE NUMBERS: Phillips' net income dropped to $535 million, or 87 cents per share, compared with $1.60 billion, or $2.51 per share, a year earlier. Analysts expected 93 cents per share on $36.35 billion in revenue, according to a FactSet survey.
THE FUTURE: The Houston company said it was focusing investment in the midstream, such as gathering and shipping natural gas, and the chemicals sectors to take advantage of increasing energy production in North America.
THE STOCK: In midday trading, the shares rose 29 cents to $64.43 in midday trading. They ended Tuesday up 21 percent for the year.