While Phillips 66 Partners reported increased third quarter earnings, Phillips 66 reported a drop in earnings in the quarter.
The company announced its quarterly earnings were $712 million, a significant drop from the $1.4 billion reported in the second quarter of 2019. However, excluding special items of $690 million in the third quarter, primarily impairments related to the company’s investment in DCP Midstream, LLC adjusted earnings of $1.4 billion, same as in the second quarter.
During the quarter, the company returned $841 million to shareholders through dividends and share repurchases. Company leaders boasted of returning $25 billion to shareholders through dividends and share repurchases and exchanges since 2012.
But income was lower in some of the company’s segments.
Midstream had a third-quarter pre-tax loss of $460 million, compared with pre-tax income of $423 million in the second quarter of 2019. Midstream results in the third quarter included $900 million of impairments related to Phillips 66’s equity investment in DCP Midstream, LLC (DCP Midstream).
Transportation third-quarter adjusted pre-tax income of $248 million was $3 million higher than the second quarter, primarily due to higher pipeline volumes.
NGL and Other adjusted pre-tax income for the third quarter was $169 million, a $26 million increase from the second quarter. The improvement was mainly due to butane and propane trading activity.
The Chemicals segment reflects Phillips 66’s equity investment in Chevron Phillips Chemical Company LLC (CPChem). Chemicals’ third-quarter pre-tax income was $227 million, compared with $275 million in the second quarter. Chemicals results in the third quarter included a $42 million reduction to equity earnings from a lower-of-cost-or-market inventory adjustment.
CPChem’s Olefins and Polyolefins (O&P) business contributed $251 million of adjusted pre-tax income in the third quarter of 2019, compared with $260 million in the second quarter. The $9 million decrease mainly reflects lower margins, partially offset by higher sales volumes. Global O&P utilization was 97% in the third quarter.