Refiners’ Earnings Surge Puts Fuel Margins in Focus for Phillips 66, Valero and HF Sinclair

Phillips 66, Valero Energy and HF Sinclair reported sharply higher third-quarter earnings and revenue as favorable refining conditions supported their results.

All three companies exceeded the earnings estimates cited by Zacks Investment Research. Their results followed an October rally in energy stocks, which Zacks attributed to rising crude oil prices amid prolonged conflicts in the Middle East.

Energy gains contrasted with technology losses

The October rally in oil and energy stocks came during a mixed month for major US indexes. The Nasdaq fell 5.3%, its sharpest monthly decline since March 2025, while the S&P 500 declined 0.9% and the Dow gained 1.7%, according to Zacks.

Zacks said the artificial intelligence trade maintained its momentum in September but faced severe volatility in October. It assigned all three refiners a Zacks Rank of No. 1, or Strong Buy, and a momentum score of A.

For the current year, Zacks expected revenue growth of 22.3% at Phillips 66, 29.1% at Valero and 31.7% at HF Sinclair. It projected earnings growth of more than 100% for each company.

Phillips 66: Higher utilization and wider margins

Phillips 66 (NYSE: PSX) reported third-quarter 2026 adjusted earnings of $14.08 per share, up 458.7% from $2.52 a year earlier. The result exceeded the Zacks consensus estimate of $11.97 per share by 17.63%.

Total revenue and other income rose 47.2% to $51.51 billion from $34.98 billion. That exceeded the consensus estimate of $33.72 billion by approximately 52.73%.

Phillips 66 combines refining with midstream, chemicals, marketing and renewable fuels operations. According to Zacks, the platform provides cash-flow diversity and commercial flexibility, while high refinery utilization, wider margins and disciplined costs support its earnings recovery.

Zacks also identified midstream expansion and chemical projects as sources of potential future earnings capacity. It said portfolio changes strengthen the company’s network and that debt reduction and cash generation support dividends and share repurchases. Refining profits remain exposed to volatile fuel spreads.

The Zacks consensus estimate for Phillips 66’s current-year earnings rose 5.5% over the seven days preceding the report.

Valero: Gulf Coast assets and export access

Valero Energy (NYSE: VLO) reported third-quarter adjusted earnings of $23.90 per share, up 553% from $3.66 a year earlier and above the Zacks consensus estimate of $21.28 per share.

Revenue climbed 43.3% to $46.10 billion from $32.17 billion, surpassing the consensus estimate by 23.29%.

Zacks attributed the company’s performance in part to its refining scale, feedstock flexibility and access to export markets. It said limited spare refining capacity and low fuel inventories support product margins across Valero’s refineries.

The company’s complex Gulf Coast assets can process discounted heavy crude and reach export markets, according to Zacks. Its St. Charles optimization project is expected to increase output of higher-value products and improve the asset mix.

Valero also has renewable diesel and ethanol operations. Zacks said those businesses provide earnings diversity, supported by fuel credit economics and production incentives. The consensus estimate for Valero’s current-year earnings rose 1.1% over the preceding seven days.

HF Sinclair: Refining and portfolio projects

HF Sinclair (NYSE: DINO) reported quarterly adjusted earnings of $11.75 per share, compared with $2.44 a year earlier. The result exceeded the Zacks consensus estimate of $8.17 per share.

Revenue rose to $10.86 billion from $7.25 billion a year earlier and surpassed the consensus estimate by 45.68%.

Zacks said tight product supply and low inventories were supporting gasoline and distillate economics for HF Sinclair. It also pointed to the company’s regional asset base and projects intended to improve its ability to capture margins.

The El Dorado vacuum furnace and Go-West initiatives are expected to expand feedstock and logistics flexibility. Renewables provide another earnings stream, with higher credit values, tax benefits and volumes supporting profitability, according to Zacks.

Zacks said the planned separation of the Lubricants & Specialties business could sharpen HF Sinclair’s strategic focus and lower capital intensity. It also said retirement of the Mississauga refining assets may reduce exposure to volatile base oil cracks. The consensus estimate for the company’s current-year earnings rose 9.7% over the preceding seven days.