(Bloomberg) -- Phillips 66 followed rival refiner Valero Energy Corp. in blowing away investors with an earnings beat after taking advantage of cheap North American crude.
Houston-based Phillips 66 reported record fourth-quarter earnings of $4.87 a share, excluding certain items, according to a statement Friday. That beat the $3.01 average estimate of 18 analysts surveyed by Bloomberg. Shares surged as much 7 percent in pre-market trading.
The company says it was able to boost refining margins partly by using its network of pipelines and terminals to capture cheaper crude from the Bakken Shale and Canada. It also kept its Gulf Coast refineries running at 100 percent.
Phillips 66’s peers have followed a similar recipe. Valero impressed investors with stronger-than-expected margins after it was able to process cheaper crudes from other other parts of the country. Marathon Petroleum Corp., the biggest U.S. refiner, missed estimates due to expenses associated with its acquisition of Andeavor and debt extinguishment, but posted strong refining results.
The biggest refiners are benefiting from diesel processing in a robust U.S. economy, as well as a drop of about 40 percent in crude prices in the final three months of last year.
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