Valero Beats on Earnings & Revs - Analyst Blog

A generic image of many stacks of coins
Credit: Shutterstock photo

Valero Energy Corporation ( VLO ) posted adjusted third quarter 2013 income of 57 cents per share, surpassing the Zacks Consensus Estimate of 42 cents by 35.7%.

The quarterly earnings compare unfavorably with the year-ago adjusted earnings of $1.90 per share. The decline was mainly due to lower refining throughput margins in each of the company's regions and higher refining operating expenses.

Total revenue for the quarter increased 4.1% year over year to $36,137.0 million from $34,726.0 million and beat the Zacks Consensus Estimate of $30,499.0 million.

Throughput Volumes

During the quarter, refining throughput volumes were approximately 2.77 million barrels per day, up from the year-earlier level of 2.60 million barrels a day. This was primarily due to less unplanned maintenance activity and less weather-related downtime.

By feedstock composition, sweet crude, medium/light sour crude and heavy sour crude accounted for 40%, 16% and 17%, respectively. The remaining volumes came from residuals, other feedstock as well as blendstocks and others.

The Gulf Coast accounted for approximately 56% of the total volume. The Mid-Continent, North Atlantic and West Coast regions accounted for 16%, 18% and 10%, respectively.

Throughput Margins

Company-wide throughput margins decreased considerably to $7.76 per barrel from the year-ago level of $13.12 per barrel. The decrease was due to lower discounts for gasoline and diesel margins as well as lesser light sweet and sour crude oil.

Average throughput margin realized was $7.88 per barrel in the U.S. Gulf Coast (down from $11.05 per barrel in the year-earlier quarter), $9.22 per barrel in the U.S. Mid-Continent (down from $22.07), $7.86 per barrel in the North Atlantic (down from $13.25) and $4.60 per barrel in the U.S. West Coast (down from $8.91).

Total operating cost per barrel was $5.41 during the quarter, 4.6% higher than the year-earlier figure of $5.17. Refining operating expenses per barrel were $3.74 versus $3.72 in the year-ago quarter. Depreciation and amortization expenses increased 15.2% year over year to $1.67 per barrel.

Capital Expenditure & Balance Sheet

Third quarter capital expenditure totaled $557.0 million, including $78 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 $122 million through dividends.

Valero maintained its total capital spending for 2013 at around $2.85 billion, including spending for turnarounds and catalyst expenditures as well as the retail segment. For 2014, Valero expects capital expenditures of $3.0 billion.

Zacks Rank

The stock retains a Zacks Rank #4 (Sell). However, there are certain Zacks Ranked #1 stocks - TransAtlantic Petroleum Ltd ( TAT ), Matador Resources Company ( MTDR ) and Northern Oil and Gas, Inc. ( NOG ) - that appear more rewarding in the short term.

MATADOR RESOURC (MTDR): Free Stock Analysis Report

NORTHRN OIL&GAS (NOG): Free Stock Analysis Report

TRANSATL PETROL (TAT): Free Stock Analysis Report

VALERO ENERGY (VLO): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics

Earnings Stocks

Latest Markets Videos