Phillips 66 posted an adjusted loss of $1.09 billion, or $1.16 per share, during the fourth quarter. That was a significant reversal from its year-ago fourth-quarter profit of $324 million and missed the analysts' consensus estimate by $0.16 per share.
The main issue weighing on Phillips' results was lower refinery utilization. The company only produced at 69% of its capacity during the fourth quarter, down from 77% in the third quarter. Two hurricanes hit Louisiana during the period, causing it to shut down its Alliance refinery, and maintenance activities had an effect.
The company also experienced headwinds in its midstream and marketing and specialties businesses, which saw their adjusted earnings decline by at least 20% year over year. That was due to continued weak demand for oil and refined products because of the pandemic. On a more positive note, earnings from the company's chemicals joint venture improved by 17%.
While 2020 was a challenging year for Phillips 66, 2021 should be much better. The rollout of vaccines should enable a return to normal in the coming months, giving people greater confidence to travel and commute to work. That should increase oil demand, boosting Phillips 66's utilization rates and margins, which could fuel a rebound in its stock price.