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Oct 26 (Reuters) - Valero Energy Corp reported better-than-expected quarterly profit on Thursday, supported by strong margins and a rise in refining activity after a crippling hurricane season hurt refiners on the U.S. Gulf coast.
Hurricane Harvey, which struck Texas in late August, knocked out half of the capacity in the U.S. Gulf coast, causing U.S. gasoline prices to skyrocket, while Brent/US crude spread hit its widest in over two years.
Valero’s refining business earned $10.94 as throughput margin per barrel from $8.72 a year ago, while its refineries ran at 92 percent capacity during the quarter ended Sept. 30.
Refiners depend on margins from their end product like gasoline and jet fuel, unlike exploration and production companies whose profits come from unearthing crude oil.
Net income attributable to Valero rose to $841 million, or $1.91 per share, in the third quarter, from $613 million, or $1.33 cents per share, a year earlier.
Analysts on average expected earnings of $1.83 per share, according to Thomson Reuters I/B/E/S.
The San Antonio, Texas-based refiner also agreed to sell its Port Arthur terminal and Parkway Pipeline assets to its publicly listed midstream unit Valero Energy Partners LP for $508 million.
Operating revenue for the world’s largest independent petroleum refiner rose to $23.56 billion from $19.65 billion a year earlier. (Reporting by Ahmed Farhatha in Bengaluru; Editing by Supriya Kurane)