A large art installation representing Frank Phillips' oil company, Phillips 66, sits in front of the Price Tower Arts Center in Bartlesville. MATT BARNARD / Tulsa World file
So how has Phillips 66 been faring since splitting off from parent ConocoPhillips?
Quite well so far. It recently reported second-quarter profits of $958 million, or $1.53 per share. That's down from a quarterly profit of $1.4 billion a year ago, though most energy companies have taken a hit, said Brian Smith, financial adviser with CastleRock Financial Advisors in Collinsville.
"The whole energy sector has lagged in the last year," he said.
Even with the decline in profit, the company reported it paid $700 million in dividends and stock repurchases, and it recently announced an additional $1 billion in future stock repurchases, which should represent close to 3 percent of the company's total stock.
Smith said these buybacks are a big part of why ConocoPhillips, the largest U.S. refiner by revenue, is a stable pick. James Brock, financial planner with Brock & Associates, a financial advisory practice of Ameriprise Financial Services Inc., said Phillips 66 has carefully narrowed its focus on specific technical and product areas.
"They've been able to sharpen their focus without diluting their management talent," he said. "That's the general attitude from most analysts following them."
Smith predicted a 5 percent growth in the company's operating income in its refining and operating business over the next year, with low natural gas prices boosting its chemical segment.
Although Brock is positive on the stock, he does have concerns about the pace of the company's activity.
"All the refining and drilling is creating a capacity that's outpacing our own consumption," he said. "These companies are going to need to find new outlets for that consumption."
Phillips 66
Address: 3010 Briarpark
Drive, Houston, TX, 77042
Phone: 281-293-6600
Web: www.phillips66.com
Chairman and CEO: Greg
Garland
Symbol (Exchange): PSX
(NYSE)
Operation: Midstream,
chemicals and refining,
formerly part of ConocoPhillips
Robert Evatt 918-581-8447
robert.evatt@tulsaworld.com
Original Print Headline: Narrow focus an asset
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