Phillips 66 stock research
FY2023 Q2
Phillips 66 (PSX) Gross Margin — Quarter Ended Jun 30, 2023
This quarter, revenue increased compared to the immediately preceding quarter, but gross profit declined, causing gross margin to weaken. Compared to the same quarter one year ago, revenue was lower, gross profit was lower, yet gross margin improved due to cost of revenue declining more as a share of revenue.
Gross margin takeaway
Quarter ended Jun 30, 2023 · FY2023 Q2
This quarter, revenue increased compared to the immediately preceding quarter, but gross profit declined, causing gross margin to weaken. Compared to the same quarter one year ago, revenue was lower, gross profit was lower, yet gross margin improved due to cost of revenue declining more as a share of revenue.
- Gross margin weakened sequentially as cost of revenue increased more than proportionally to the rise in revenue. On a year-over-year basis, the margin strengthened because the decline in cost of revenue was proportionally greater than the decline in revenue.
- Sequentially, revenue was higher, but cost of revenue was also higher and grew faster, resulting in a lower gross profit and a weakened gross margin. Year-over-year, revenue and gross profit were both lower, but gross margin improved because cost of revenue fell as a larger share of total revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
12.9%
Gross profit
$4.5B
Revenue
$35.1B
Cost of revenue
$30.6B
Quarter-over-quarter change
-1.8 pts
Year-over-year change
+0.7 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $34.4B | $5.1B | $29.3B | 14.7% |
| Jun 30, 2023 | $35.1B | $4.5B | $30.6B | 12.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2023
-1.8 pts
Year-over-year change
Jun 30, 2022
+0.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
Gross margin weakened sequentially as cost of revenue increased more than proportionally to the rise in revenue. On a year-over-year basis, the margin strengthened because the decline in cost of revenue was proportionally greater than the decline in revenue.
Sequentially, revenue was higher, but cost of revenue was also higher and grew faster, resulting in a lower gross profit and a weakened gross margin. Year-over-year, revenue and gross profit were both lower, but gross margin improved because cost of revenue fell as a larger share of total revenue.
Monitor the trajectory of cost of revenue relative to revenue, as cost growth outpaced revenue growth sequentially, pressuring margin.