3Q 2026
Filed Oct 28, 2026Reported third-quarter earnings and adjusted earnings of $5.6 billion or $14.08 per share, supported by 98% refining utilization and record Central Corridor processed inputs of 848 MBD.
Third-quarter reported earnings increased to $5.6 billion from $3.8 billion in the second quarter, led by a $2,969 million sequential increase in Refining earnings. Cash flow from operations was $7.3 billion, the company returned $2.8 billion to shareholders, and total debt decreased to $18.5 billion.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Earnings attributable to Phillips 66, 3Q 2026GAAP | $5.62B | $1,769 million | – |
| Adjusted earnings attributable to Phillips 66, 3Q 2026non-GAAP | $5.62B | $1,831 million | – |
| Earnings per share of common stock, diluted, 3Q 2026GAAP | $14.08 per diluted share | – | – |
| Adjusted earnings per share of common stock, diluted, 3Q 2026non-GAAP | $14.08 per diluted share | – | – |
| Adjusted EBITDA, 3Q 2026non-GAAP | $8.07B | $2,177 million | – |
| Cash flow from operations, 3Q 2026GAAP | $7.28B | – | – |
| Cash flow from operations, excluding working capital, 3Q 2026non-GAAP | $6.18B | – | – |
| Capital expenditures & investments, 3Q 2026other | $680M | – | – |
| Acquisitions, net of cash acquired, 3Q 2026other | — | – | – |
| Proceeds from asset dispositions, 3Q 2026other | $16M | – | – |
| Return of capital to shareholders, 3Q 2026other | $2.78B | – | – |
| Repurchases of common stock, 3Q 2026other | $2.27B | – | – |
| Dividends paid on common stock, 3Q 2026other | $504M | – | – |
| Cash and cash equivalents, September 30, 2026other | $5.85B | – | – |
| Debt, September 30, 2026other | $18.53B | – | – |
| Net debt, September 30, 2026non-GAAP | $12.68B | – | – |
| Debt-to-capital ratio, September 30, 2026other | 34% | – | – |
| Net debt-to-capital ratio, September 30, 2026non-GAAP | 26% | – | – |
| Midstream pre-tax income, 3Q 2026other | $702M | ($83) million | – |
| Chemicals pre-tax income, 3Q 2026other | $311M | ($93) million | – |
| Refining pre-tax income, 3Q 2026other | $6.03B | $2,969 million | – |
| Marketing and Specialties pre-tax income, 3Q 2026other | $245M | ($338) million | – |
| Renewable Fuels pre-tax income, 3Q 2026other | $191M | ($353) million | – |
| Corporate and Other pre-tax loss, 3Q 2026other | ($372) million | $35 million | – |
| Income tax expense, 3Q 2026GAAP | $1.47B | $377 million | – |
| NGL Pipeline Throughput - Y-Grade to Market, 3Q 2026other | 982 MBD | 39 MBD | – |
| NGL Fractionated, 3Q 2026other | 1,003 MBD | (17) MBD | – |
| Chemicals Global O&P Capacity Utilization, 3Q 2026other | 92% | 1% | – |
| Refining turnaround expense, 3Q 2026other | $79M | ($44) million | – |
| Realized refining margin, 3Q 2026non-GAAP | $38.00 per barrel | $13.92 per barrel | – |
| Crude capacity utilization, 3Q 2026other | 98% | 2% | – |
| Clean product yield, 3Q 2026other | 86% | —% | – |
| Renewable Fuels Produced, 3Q 2026other | 47 MBD | (6) MBD | – |
| Earnings attributable to Phillips 66, Sep YTD 2026GAAP | $9.67B | – | – |
| Adjusted earnings attributable to Phillips 66, Sep YTD 2026non-GAAP | $9.61B | – | – |
| Earnings per share of common stock, Sep YTD 2026GAAP | $24.05 | – | – |
| Adjusted earnings per share of common stock, Sep YTD 2026non-GAAP | $23.89 | – | – |
Capital returns
- Returned $2.8 billion to shareholders through dividends and share repurchases.
- Return of Capital to Shareholders was $2,777 million in 3Q 2026, including $2,273 million of repurchases of common stock and $504 million of dividends paid on common stock.
- The company targets returning more than 50% of net operating cash flow to shareholders.
- The company announced its second dividend increase of 2026.
What drove it
- Refining adjusted pre-tax income increased compared with the second quarter mainly due to higher realized margins and volumes; margins were primarily driven by an increase in market crack spreads.
- Refining utilization was 98%, with record Central Corridor processed inputs of 848 MBD.
- Third-quarter record distillate yield was 41%, while clean product yield was 86%.
- Midstream fractionation volumes were 1 MMBD, wellhead volumes were 4.6 Bcf/D and utilization at the Freeport LPG export dock was 105%.
- Chemicals pre-tax income was partially supported by higher polyethylene volumes and lower costs.
- Corporate and Other pre-tax loss decreased compared with the second quarter mainly due to lower net interest expense.
Concerns
- Midstream pre-tax income decreased compared with the second quarter mainly due to lower margins associated with gas transportation.
- Chemicals pre-tax income decreased compared with the second quarter mainly due to lower polyethylene margins.
- Marketing and Specialties adjusted pre-tax income decreased compared with the second quarter mainly due to lower global marketing fuel margins, primarily driven by a rising price environment.
- Renewable Fuels pre-tax income decreased compared with the second quarter mainly due to lower margins, including inventory impacts, as well as higher costs.
- The third quarter included a pre-tax special item adjustment of ($29) million in the Refining segment.
What to watch
- The proposed Western Gateway Pipeline system has an expected in-service date in 2029.
- Coastal Bend expansion initial volumes are expected in the fourth quarter of 2026, with full ramp-up to 350 MBD expected in early 2027.
- Chevron Phillips Chemical Company LLC expects full operations for both the Golden Triangle Polymers Project and Ras Laffan Polymers Project in 2027.
- The company reported greater than $50 million of near-term synergies following its acquisition of the remaining 50% interest in WRB Refining LP on October 1, 2025.
- Future refining realized margins, market crack spreads and processed volumes remain central operating measures.
Balance sheet and cash flow
- Cash Flow from Operations was $7,281 million in 3Q 2026.
- Cash Flow from Operations, Excluding Working Capital was $6,185 million in 3Q 2026.
- Capital Expenditures & Investments were $680 million in 3Q 2026.
- Cash and Cash Equivalents were $5,848 million as of September 30, 2026.
- Committed capacity available under credit facilities was $6.4 billion as of September 30, 2026.
- Debt was $18,530 million as of September 30, 2026, compared with $20,565 million as of June 30, 2026.
- Net Debt was $12,682 million as of September 30, 2026, compared with $16,466 million as of June 30, 2026.
Analysis
Phillips 66 reported third-quarter earnings of $5,616 million and adjusted earnings of $5,619 million, compared with $3,847 million and $3,788 million, respectively, in the second quarter. Diluted earnings per share and adjusted diluted earnings per share were both $14.08. The reported and adjusted results were close because the quarter included a pre-tax special item adjustment of ($29) million in Refining.
Refining was the clear source of the sequential improvement. Refining pre-tax income rose to $6,031 million from $3,062 million, while adjusted pre-tax income rose to $6,060 million from $3,086 million. Management attributed the increase mainly to higher realized margins and volumes, with margins primarily driven by an increase in market crack spreads. Realized refining margin was $38.00 per barrel versus $24.08 per barrel, and crude capacity utilization increased to 98% from 96%.
Other operating businesses were weaker sequentially. Midstream pre-tax income declined to $702 million from $785 million on lower gas transportation margins, Chemicals declined to $311 million from $404 million on lower polyethylene margins, and Renewable Fuels declined to $191 million from $544 million on lower margins, inventory impacts and higher costs. Marketing and Specialties adjusted pre-tax income declined to $245 million from $514 million, as lower global marketing fuel margins were primarily driven by a rising price environment.
Cash generation and capital allocation were substantial in the period. Cash flow from operations was $7,281 million and cash flow from operations excluding working capital was $6,185 million. The company returned $2,777 million to shareholders, including $2,273 million of repurchases and $504 million of dividends. Debt decreased to $18,530 million and net debt decreased to $12,682 million as of September 30, 2026, while the net debt-to-capital ratio declined to 26% from 33%.
The filing did not provide formal financial guidance. Its disclosed forward milestones include initial Coastal Bend expansion volumes in the fourth quarter of 2026, full ramp-up to 350 MBD in early 2027, expected full operations for two chemicals projects in 2027, and an expected 2029 in-service date for the proposed Western Gateway Pipeline system. The principal near-term operating focus is whether Refining can sustain the higher realized margins and volumes that drove third-quarter results while the lower-margin pressures in Midstream, Chemicals, Marketing and Specialties, and Renewable Fuels persist.
Management, verbatim
Phillips 66 delivered strong operating performance in the third quarter and is executing on its financial and operating commitments.
Mark Lashier, chairman and CEO of Phillips 66
The company remains steadfast in its disciplined approach to capital allocation. We target returning more than 50% of net operating cash flow to shareholders and delivering attractive, sustainable dividend growth across commodity cycles.
Mark Lashier, chairman and CEO of Phillips 66
Not in the filing
stated, not guessed- Total revenue was not reported.
- Segment revenue was not reported; the filing reported segment pre-tax income and adjusted pre-tax income instead.
- Gross margin was not reported.
- Operating income was not reported.
- Free cash flow was not reported.
- A formal financial outlook for revenue, gross margin, operating expenses, tax rate or earnings was not provided.
- Previous-release outlook was not provided, so no comparison with prior guidance is available.
- Prior-year comparisons were not reported for cash flow from operations, capital expenditures, capital returns, cash, debt, net debt, refining utilization, refining margin and the disclosed operating-volume metrics.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.