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April 5 (Reuters) - U.S. refiner Phillips 66 on Monday predicted that its first-quarter loss would be larger than expected, citing the severe winter cold snap that battered its U.S. Gulf Coast petrochemical operations.
A February deep freeze in U.S. central and southern states led to power outages and gas-supply disruptions that knocked oil refineries and chemical plants out of commission for up to two weeks. Several companies have issued warnings due to the storm.
Phillip 66’s adjusted net loss will reach between $550 million and $700 million for the quarter ended March 31 due to lost production and higher costs from the outages, it said. IBES data on Refinitiv had estimated a $210 million loss.
First-quarter results are scheduled to be released on April 30.
“Q1 is a throwaway quarter that a lot of investors are looking past” because of the storm outages, said Matthew Blair, a refining and chemicals analyst at Tudor, Pickering, Holt & Co. “Q2 will be a much better spot on chemical and refining margin improvements,” he said.
Phillips 66 will suffer a larger impact than rivals because of its recent reliance on chemicals for earnings, Blair said.
Its chemical plants ran at about mid-70% of capacity, down from a projected 90%. Its refining and marketing and specialties segments also were hurt by lower global demand for refined petroleum products due to the COVID-19 pandemic.
Exxon Mobil last week said the winter weather would cut its first quarter profit by up to $800 million, with the largest impact in its chemical and refining units.
Phillips 66 had reported a $2.5 billion first-quarter net loss in the year-ago quarter, on writedowns. It expects to recognize a first-quarter impairment reflecting Phillips 66 Partners’ decision to exit the Liberty Pipeline project.
Shares fell a fraction in late trading after closing at $82.06, down 1.3% on the day. (Additional reporting by Gary McWilliams in Houston; Editing by Ramakrishnan M., Anil D’Silva and David Gregorio)