Phillips 66 posted net earnings of $207 million for the first quarter of 2026, with adjusted earnings of $200 million and an adjusted earnings per share of $0.49, as the company’s midstream segment offset compressed refining margins across most regions. Shareholder distributions reached $778 million in the quarter, and the board raised the annualised quarterly dividend by 7%.
Phillips 66 Q1 2026 Results: Midstream Carries the Quarter
Midstream delivered adjusted pre-tax income of $591 million, the strongest segment performance in the quarter and broadly flat against the $638 million recorded in Q4 2025 before a $79 million impairment charge is stripped out. Chemicals returned to positive territory with adjusted pre-tax income of $85 million, recovering from a $12 million loss in the prior quarter.
Refining posted adjusted pre-tax income of $208 million, up from an adjusted $542 million in Q4 2025 on a like-for-like basis — though the quarter-on-quarter decline reflects weaker gasoline and secondary product cracks, commodity price headwinds from WTI last-day pricing, and higher freight rates. Diesel cracks provided a partial offset. Crude utilisation held at 95% with clean product yield at 87%, and worldwide market capture came in at 138% against the RIN-adjusted market indicator of $7.31 per barrel.
Marketing and Specialties recorded an adjusted pre-tax loss of $141 million, compared with adjusted income of $439 million in Q4 2025. The prior quarter included a $1.978 billion gain on the sale of a 65% interest in the Germany and Austria retail marketing business, which inflated the comparative base.
Sweeny and Freeport Capacity Formally Increased
Phillips 66 formally recognised capacity increases at two key Gulf Coast assets during Q1 2026. Sweeny Hub NGL fractionation capacity has been increased by 23%, and the Freeport LPG export dock capacity has been raised by 15%, both reflecting debottlenecking work completed during 2025. The upgrades strengthen the company’s NGL and LPG export position at a time when Gulf Coast export infrastructure is under sustained demand pressure.
The Midstream segment’s consistent performance — above 99% asset availability as a stated target — underpins the company’s broader wellhead-to-consumer integration strategy. For context on how Phillips 66’s midstream assets sit within the North American pipeline and terminal landscape, see OGSN’s coverage of the top 10 midstream companies in 2026.
Balance Sheet and Debt Reduction Path
Total debt stood at $27.1 billion at March 31, 2026, with a net debt-to-capital ratio of 43%. Phillips 66 has outlined a clear path to reduce total debt to $19 billion by year-end 2026 and $17 billion by year-end 2027, drawing on consensus operating cash flow estimates of $8.0 billion and $8.8 billion for 2026 and 2027 respectively, plus $4 billion of excess cash on hand and working capital normalisation.
Operating cash flow was negative $2.3 billion in the quarter, driven by a $3.0 billion working capital outflow. Excluding working capital, operating cash flow was $699 million. Capital expenditure and investments totalled $582 million.
Phillips 66 Q1 2026 Results: 2Q Outlook
For the second quarter of 2026, Phillips 66 guided refining crude utilisation at low-to-mid 90%, with turnaround expense of $120–$150 million. The Central Corridor is carrying the largest planned turnaround spend at $85–$95 million. Global olefins and polyolefins utilisation is guided at low 80% through CPChem. Corporate and other costs are guided at $430–$450 million, now including decommissioning and redevelopment costs for the idled Los Angeles Refinery site.
The company’s 2027 strategic targets remain unchanged: refining adjusted controllable costs of approximately $5.50 per barrel, total mid-cycle adjusted EBITDA growth of more than $1.0 billion in Midstream and Chemicals, and a net debt-to-capital ratio below 30%. Full details on the Phillips 66 company profile page. For broader downstream sector context, see OGSN’s ranking of the top 10 downstream oil and gas companies in 2026.
Phillips 66 reported its Q1 2026 results on April 29, 2026. The full earnings presentation is available via the Phillips 66 investor relations website.
What were Phillips 66’s earnings in Q1 2026?
Phillips 66 reported net earnings of $207 million and adjusted earnings of $200 million for the first quarter of 2026. Adjusted earnings per share came in at $0.49, based on approximately 403 million weighted-average diluted shares.
Did Phillips 66 raise its dividend in Q1 2026?
Yes. Phillips 66 increased its annualised quarterly dividend by 7% during the first quarter of 2026. Total shareholder distributions in the quarter, including dividends and share repurchases, reached $778 million.
How did Phillips 66’s refining segment perform in Q1 2026?
Refining posted adjusted pre-tax income of $208 million. Crude utilisation held at 95% with 87% clean product yield and 138% worldwide market capture against the RIN-adjusted indicator. Margins were pressured by weaker gasoline cracks, higher freight rates, and WTI pricing headwinds, partially offset by stronger diesel cracks.
What capacity upgrades did Phillips 66 announce in Q1 2026?
Phillips 66 formally increased Sweeny Hub NGL fractionation capacity by 23% and Freeport LPG export dock capacity by 15%, both reflecting debottlenecking work completed in 2025.
What is Phillips 66’s debt reduction target?
Phillips 66 is targeting total debt of $19 billion by end of 2026 and $17 billion by end of 2027, down from $27.1 billion at March 31, 2026. The reduction path relies on consensus operating cash flow of $8.0–$8.8 billion annually and $4 billion of excess cash on hand.