Phillips 66 reported a bigger-than-expected loss in the first quarter on Friday, as lower refining margins amid a widespread maintenance and turnaround activity across the U.S. refining sector weighed on its performance.
U.S. refineries typically undergo seasonal maintenance and turnaround activities in preparation for the summer driving season, when fuel demand significantly increases.
However, this scheduled downtime temporarily reduces refinery utilization and the ability to capture revenue from margins, often impacting quarterly performance.
“Our results reflect not only a challenging macro environment, but also the impact from one of our largest-ever spring turnaround programs,” said CEO Mark Lashier.
The company’s refining unit posted a loss of $937 million during the first quarter, compared with a profit of $216 million a year ago.
Phillips 66 said its realized refining margins fell to $6.81 per barrel during the January-March quarter, from $11.01 a barrel a year earlier. Its refinery utilization stood at 80% compared with 92% last year.
The Houston, Texas-based company posted an adjusted loss of 90 cents per share for the three months ended March 31, compared with analysts’ average estimate of 72-cent-per-share loss, according to data compiled by LSEG.
(Reporting by Vallari Srivastava in Bengaluru; Editing by Maju Samuel and Shilpi Majumdar)