Phillips 66 (NYSE:PSX) reported fourth-quarter earnings that surpassed expectations, driven by record performance in its midstream and refining segments even as it navigates the costly wind-down of its Los Angeles refining operations.
The Houston-based energy giant posted net income of $2.9 billion, or $7.17 per share, for the final three months of 2025.
When adjusted for one-time items, earnings stood at $1 billion, or $2.47 per share.
These results included a $239 million pre-tax charge for accelerated depreciation related to the Los Angeles Refinery.
The company’s midstream unit reached a significant milestone, achieving record Natural Gas Liquids (NGL) transportation and fractionation volumes exceeding 1 million barrels per day (MMBD) for each category.
Refining operations remained a pillar of strength, with the company reporting a record clean product yield of 88% and a crude capacity utilization rate of 99%.
This operational efficiency helped generate $2.8 billion in net operating cash flow during the quarter.
In a move that signaled disciplined balance sheet management, Phillips 66 reduced its total debt by $2 billion, ending the year with $19.7 billion in outstanding obligations.
For the full year 2025, the company delivered $4.4 billion in earnings, or $10.79 per share, while returning $3.1 billion to shareholders through dividends and buybacks—representing more than half of its net operating cash flow.
Meanwhile, the year was marked by aggressive portfolio reshaping, with Phillips 66 completing both asset acquisitions and dispositions totaling $3.5 billion each.