U.S. refining giant Phillips 66 has reported a 12 percent increase in profit in the first quarter of the year, with its midstream and chemical businesses playing a major role in the quarter's strong performance.

Total earnings for the first quarter of 2014 came in at $1.57 billion, equaling $2.67 per share, compared to $1.41 billion, or $2.23 per share, in the same period last year. The chemical and midstream divisions accounted for more than half of Phillips 66's earnings, which clearly shows that the company has refocused on less financially volatile areas, rather than its traditional strength of refining.

A significant rise in income was recorded for the company's midstream business, where earnings went up almost 70 percent to $188 million. Within this category the company reported $62 million in earnings from its transportation business, up on $50 million in the final quarter of 2013. The increase was due to higher throughput fees and railcar rates and lower operating costs, the company explained.

Meanwhile, Phillips 66's chemical business generated $316 million in the first quarter, which was 12 percent higher than between January and March 2013 and also a historical quarterly high for the chemical business. Earnings in this segment were reinforced by the company's equity investment in Chevron Phillips Chemical Company LLC, whose olefins and polyolefins business added a total of $283 million to Phillips 66's earnings, up on $262 million in the previous quarter.