Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Reported and adjusted earnings | $5.6 billion | Not stated |
| Operating cash flow | $7.3 billion | Not stated |
| Refining utilization | 98% | Not stated |
| Net debt to capital ratio | 26% | Not stated |
| Capital spending | $680 million | Not stated |
Guidance and outlook
- In Chemicals, we expect the global O&P utilization rate to be in the mid-80s.
- In refining, we expect the worldwide crude utilization rate to be in the mid-90s.
- Turnaround expense is expected to be between $140 million and $170 million.
- We anticipate corporate and other costs to be between $350 million and $380 million.
How management sounded
Positive (+6 on our -10 to +10 scale). Management expressed high confidence in their business model, highlighted by two dividend increases in 2026 and a clear path for midstream growth through the decade. Management sounded more upbeat than on 8% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
Crude Differentials
Asked: How does North American refining compare to global peers regarding crude differentials?
Answer: Brian Mandell noted that WTI pricing is strong due to diesel margins, and heavy crude differentials are pressured by freight and supply factors, benefiting Phillips 66's access to Canadian crude.
Dividend Sustainability
Asked: How does the Board view the sustainability of the dividend given the two raises this year?
Answer: Mark Lashier stated the dividend is supported by consistent midstream earnings, refining commercial value chain optimization, and a solid macro environment allowing for share repurchases and balance sheet strengthening.
Capital Allocation
Asked: Should shareholders expect the pace of buybacks to remain high?
Answer: Mark Lashier confirmed the commitment to return 50% of operating cash flow, noting they are building cash to meet this commitment and will clear it as soon as possible.
Refining Outlook
Asked: What factors are being watched that could sustain or normalize refining margins?
Answer: Brian Mandell highlighted monitoring global demand, geopolitical conflicts in Iran and Ukraine, Chinese export quotas, and freight rates, noting that current signs suggest margins may maintain strength through most of next year.
What to watch before the next call
- The progress of the Western Gateway project, which will increase capital spending in 2027 and 2028.
- The transition in refining leadership as Chris Chandler prepares to take over from the retiring Rich Harbison at the beginning of 2027.
- The startup of the Golden Triangle Polymers and Ras Laffan petrochemical projects in 2027.
