 "Phillips 66")
Refiner Phillips 66 reported a narrower-than-expected loss on Friday as strength in its renewable fuels unit helped offset a sharp decline in refining margins.
Shares of the company were down about 1 per cent at $119.80 in premarket trade.
The renewable fuels segment, which produces sustainable aviation fuel (SAF) among others, reported a quarterly profit of $28 million, compared to a loss of $11 million from a year earlier, driven by higher margins at its Rodeo Complex in San Francisco and strength in international markets.
SAF is considered a key solution for decarbonizing the aviation sector, which has been under pressure to reduce its significant carbon footprint.
The fuel - which is made from renewable feedstocks, such as waste oil, fats, and greases - was a major driver of domestic biofuel production in 2024, according to the US Energy Information Administration.
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On an adjusted basis, the company reported a loss of 15 cents per share in the quarter, compared with the analysts' average estimate of 23 cents loss per share, according to data compiled by LSEG.
The company's refining unit posted a loss of $775 million in the quarter, compared with a profit of $859 million last year.
On a reported basis, the Houston, Texas-based company's profit nosedived to $8 million in the quarter, from last year's $1.26 billion as lower refining margin and weak demand for refined products took its toll.
The US refining industry saw exceptional profits for two years following supply shortages from Russia's invasion of Ukraine, while a post-pandemic demand surge drove up margins.
However, new refining capacity came online at the end of 2023, causing margins to return to normal levels and putting pressure on refiner profits.
The company's quarterly realized refining margin tumbled 56 per cent to $6.08 per barrel, from a year earlier and said its quarterly crude capacity utilization stood at 94 per cent, compared with 92 per cent from a year earlier.
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