Valero Energy Corporation
) posted adjusted first quarter 2013 income of $1.18 per share,
beating the Zacks Consensus Estimate of $1.01 by 16.8%.
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The quarterly earnings compare favorably with the year-ago
adjusted earnings of 31 cents per share. This growth was
bolstered by higher refining throughput margins in each of the
company's regions, except the U.S. West Coast, along with lower
refining operating expenses.
Total revenue in the quarter decreased 4.8% year over year to
$33,474.0 million from $35,167.0 million and missed the Zacks
Consensus Estimate of $33,672 million.
During the quarter, refining throughput volumes were
approximately 2.57 million barrels per day, marginally up from
the year-earlier level of 2.56 million barrels a day. This was
primarily backed by major turnaround, maintenance and repair
activity at refineries in Valero's U.S. Gulf Coast region,
including the Texas City, Corpus Christi and Port Arthur
refineries; and at its Benicia and Wilmington refineries in the
U.S. West Coast region.
By feedstock composition, sweet crude, medium/light sour crude
and heavy sour crude accounted for 42%, 16% and 19%,
respectively. The remaining volumes came from residuals, other
feedstock as well as blendstocks and others.
The Gulf Coast accounted for approximately 55% of the total
volume. The Mid-Continent, North Atlantic and West Coast regions
accounted for 17%, 19% and 9%, respectively.
Company-wide throughput margins increased considerably to $10.59
per barrel from the year-ago level of $7.71 per barrel. The
increase was buoyed by higher discounts for diesel and jet fuel
as well as wider discounts on crude oil and feedstock.
Average throughput margin realized was $10.00 per barrel in the
U.S. Gulf Coast (up from $6.92 per barrel in the year-earlier
period), $17.41 per barrel in the U.S. Mid-Continent (up from
$13.80), $8.45 per barrel in the North Atlantic (up from $5.64)
and $6.26 per barrel in the U.S. West Coast (down from $6.32).
Total operating cost per barrel was $5.34 during the quarter,
down 4.6% from the year-earlier figure of $5.60. Refining
operating expenses per barrel were $3.79 versus $4.15 in the
year-ago quarter. However, unit depreciation and amortization
expenses were up 6.9% year over year at $1.55 per barrel.
Capital Expenditure & Balance Sheet
First quarter capital expenditure totaled $864.0 million,
including $287 million for turnarounds and catalyst expenditures.
At the end of the quarter, the company had cash and temporary
cash investments of $1.9 billion. Valero also rewarded
shareholders $111 million through dividends.
Valero raised its total capital spending for 2013 to around $2.85
billion, including spending for turnarounds and catalyst
expenditures and the retail segment. This is higher by $140
million from earlier forecasts, mainly due to the addition or
acceleration of growth projects including infrastructure as well
as hydrocracker expansion.
The stock retains a Zacks Rank #3 (Hold). However, there are
certain Zacks Ranked #1 stocks -
Harvest Natural Resources, Inc.
Lehigh Gas Partners LP
EPL Oil & Gas, Inc.
) - that appear more rewarding in the short term.