Valero kicks off U.S. refiners earnings season with bumper profit
Oct 25 (Reuters) - Refiner Valero Energy Corp (VLO.N) reported a bumper third-quarter profit that zoomed past Wall Street estimates on Tuesday, as margins were boosted by demand for fuel and refined products.
"Product demand across our system remains strong, with gasoline and diesel demand higher than pre-pandemic levels, and jet fuel demand steadily approaching 2019 levels," Chief Executive Officer Joe Gorder said on a post earnings call.
U.S. refineries have operated this year at record levels due to plant closings, quick recovery of domestic demand and strong export demand over Russia's invasion of Ukraine.
Valero's refinery utilization rate - the amount of oil processed compared to a plant's rated capacity - was 95% in the reported quarter, compared with last year's 91%.
San Antonio, Texas-based Valero's total refinery throughput volumes averaged 3 million barrels per day (bpd) in the quarter, which was 141,000 bpd higher than last year.
Despite high refinery utilization rates, global product supply remains constrained due to roughly 4 million bpd of global refining capacity being taken permanently off-line since 2020 for a variety of reasons, including unfavorable economics or as part of planned conversions to produce low carbon fuels, Gorder added.
Valero, the first major U.S. refiner to post results for the quarter, said refining margin more than doubled to $5.90 billion, from a year earlier and added it continues to maximize refining utilization.
Net income attributable to the company's stockholders was $2.82 billion, or $7.19 per share, for the three months ended September 30, compared with $463 million, or $1.13 per share, a year earlier.
Excluding items, Valero posted a profit of $7.14 per share, beating analysts' average estimate of $6.85 per share, according to Refinitiv.
The bullish results could bode well when other major refiners, including Marathon Petroleum (MPC.N) and Phillips 66 (PSX.N), report in coming weeks.
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