(Reuters) - Phillips 66 (NYSE:PSX) beat quarterly profit estimates on Tuesday as strength in its chemicals and midstream segments helped the refiner more than offset a slump in refining margins from lackluster fuel demand.
The company, which owns nearly 72,000 miles of U.S. pipeline systems, has moved more fuel this year than before as it expands its natural gas liquids market share.
Volumes of the super-chilled fuel that moved through its pipelines rose to 2.79 million barrels per day in the first nine months of 2024, compared with 2.70 million bpd in 2023.
The company's third-quarter adjusted profit rose 15.6% from a year earlier, also helped by an over three-fold jump in adjusted profit in its chemicals segment to $342 million, and a 4.7% drop in expenses.
However, its refining segment was hit by a drop in realized margins, driven by lower crack spreads, which fell to $8.31 per barrel in the quarter from $19.06 a barrel.
Shares of the company were down nearly 2.2% in morning trading.
U.S. refinery margins, measured by the 3-2-1 crack spread, dipped to $14.28 in mid-September, the lowest since early 2021.
Globally, refiners have seen a drop in profitability on soft consumer and industrial demand, especially in China. British energy giant BP (LON:BP) earlier today reported a fall in third-quarter profit on weaker refining margins and slowing oil demand.
Phillips 66's third-quarter adjusted profit came in at $2.04 per share, well above analysts' average estimate of $1.66, according to data compiled by LSEG.