U.S. refiner Phillips 66 joined the growing list of energy companies reporting healthy fourth-quarter profits, though its refining income was bruised by lower margins.

Houston-based Phillips 66 reported fourth-quarter earnings of $1.9 billion, compared with $1.3 billion during the same period in 2021.

Mark Lashier, the company's president and CEO, said healthy profits supported a strong return for investors.

"During 2022 we increased shareholder distributions and strengthened our balance sheet by repaying debt," he said. "Since July 2022, we have returned $2.4 billion to shareholders through share repurchases and dividends as we progress toward our commitment to return $10 billion to $12 billion by year-end 2024."

Energy companies have come under fire from a White House concerned about runaway consumer prices. Bloated profits should lead to an increase in investments in new or improved operations rather than returning that revenue to shareholders, leaders said.

But on the refining side of its operations, Phillips 66 took a bit of a hit during the fourth quarter. Pre-tax income of $1.6 billion was a sharp downturn from the $2.9 billion realized during the third quarter.

"The decrease was due primarily to lower realized margins," the company said. "Realized margins declined from $26.87 per barrel in the third quarter to $19.73 per barrel in the fourth quarter mainly due to lower market crack spreads and clean product differentials."

The crack spread is the difference between the price of crude oil and the price for refined petroleum products, such as gasoline. Refiners had enjoyed healthy margins for much of 2022, but a decline in crude oil prices and a year-end march to $3 per gallon for U.S. consumer gasoline prices seemed to take a toll.

Lashier added that the company would remain focused for much of 2023 on capital discipline.

"We are on track to deliver $1 billion of annualized savings by year-end 2023," he said.

Trading on the New York Stock Exchange under the ticker symbol PSX, shares for the refiner were down some 6% as of 11:45 a.m. EST to trade at $100.09 per share.

Copyright 2023 United Press International, Inc. (UPI). Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent., source US Top News