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Valero (VLO) Q1 Earnings Miss Estimates, Revenues Beat

Valero Energy CorporationVLO posted adjusted first-quarter 2016 earnings of 60 cents per share that lagged the Zacks Consensus Estimate of 73 cents by 17.8%.

The earnings also decreased from the year-ago adjusted income of $1.87 per share. The bottom-line deterioration was due to lower refining throughput margins in each of the company's regions.

Valero Energy Corporation (VLO) EPS BNRI - Last 5 Quarters | FindTheCompany

Total revenue in the quarter surpassed the Zacks Consensus Estimate of $10.81 billion but plunged 26.3% year over year to $15.71 billion from $21.33 billion.

Throughput Volumes

During the quarter, refining throughput volumes were 2.9 million barrels per day, marginally higher than the year-earlier level of 2.73 million barrels per day. This was primarily due to less maintenance activities during the quarter.

By feedstock composition, sweet crude, medium/light sour crude and heavy sour crude accounted for 41%, 18% and 15%, respectively. Residuals, other feedstock as well as blendstocks and others made up for the remaining volume.

The Gulf Coast accounted for about 59% of the total volume, while the Mid-Continent, North Atlantic and West Coast regions accounted for 16%, 16% and 9%, respectively.

Throughput Margins

Company-wide throughput margins decreased to $7.96 per barrel from the year-ago level of $12.39 per barrel.

Average throughput margin realized in the U.S. Gulf Coast was $8.03 per barrel as against $11.98 per barrel in the year-earlier period, in the U.S. Mid-Continent was $6.95 per barrel compared with $13.82 a year ago, in the North Atlantic was $7.94 per barrel as against $12.45 last year, and in the U.S. West Coast was $9.34 per barrel compared with $12.33 in the previous year.

Total operating cost per barrel was $5.31 during the quarter, down 6.2% from the prior-year figure of $5.66. Refining operating expenses per barrel were $3.55 as against $3.95 in the year-ago quarter. However, unit depreciation and amortization expenses increased 2.9% year over year to $1.76 per barrel.

Capital Expenditure and Balance Sheet

First-quarter capital expenditure totaled $479.0 million, which included $161 million for turnarounds and catalyst expenditures. At the end of the quarter, the company had cash and temporary cash equivalents of $3.8 billion. Valero also rewarded shareholders $282 million through dividends and repurchased 3.8 million shares for $265 million.

Valero expects its total capital spending projection for 2016 at around $2.6 billion, which includes spending for turnarounds, catalyst expenditures as well as expenses for the retail segment. About $1.6 billion of the above-mentioned capital spending is apportioned for stay-in-business capital and the other $1.1 billion is for growth investments.

Zacks Rank and Stocks to Consider

Valero holds a Zacks Rank #3 (Hold). Some better-ranked players from the same space include ReneSola Ltd. SOL , FutureFuel Corp. FF and Braskem S.A. BAK . All these sport a Zacks Rank #1 (Strong Buy).

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VALERO ENERGY (VLO): Free Stock Analysis Report

BRASKEM SA (BAK): Free Stock Analysis Report

RENESOLA LT-ADR (SOL): Free Stock Analysis Report

FUTUREFUEL CORP (FF): Free Stock Analysis Report

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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.

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