Valero Energy Corp. kicked off earnings season for U.S. refiners with a bang.
The San Antonio company said profit jumped as revenue slipped slightly in the third quarter, with both measures topping Wall Street expectations. Refining margins also rebounded, driven by strong diesel and gasoline margins amid low inventories.
Valero shares jumped on the news and finished the day up nearly 7%.
R. Lane Riggs, Valero chairman, CEO and president, said the results highlight the company’s “long-standing track record of operational and commercial excellence.”
FROM JULY: Valero profit slips in second quarter, still tops Wall Street expectations
Before the market opened Thursday, the company said profit soared 171% to $1.1 billion, or $3.66 per share, from $393 million, or $1.16 per share, a year ago. Analysts were expecting $2.95 per share.
Revenue was down about 2% to $32.17 billion, easily beating analyst expectations of $29.77 billion.
Riggs pointed to refinery throughput utilization of 97%, with the company’s Gulf Coast and North Atlantic refineries setting all-time highs for throughput. A measure of efficiency, a throughput rate of 90% or more is considered high.
The company’s average throughput volume rose to 3.1 million barrels per day from 2.9 million barrels a year earlier.
Refining margin per barrel of throughput jumped more than 44% to $13.14 from $9.09 a year earlier.
Overall, Valero’s refining segment reported operating income of $1.7 billion, up from $568 million.
Operating income at the company’s ethanol segment rose more than 19% to $183 million. Earnings were slightly offset by the renewable diesel segment, which consists of Valero’s Diamond Green Diesel joint venture. It reported an operating loss of $28 million compared with a year-ago profit of $35 million.
Renewable diesel will continue to face policy and feedstock uncertainties, said Eric Fischer, executive vice president of alternative fuels. He noted that producer tax credit changes on foreign feedstocks and sustainable aviation fuel effective Jan. 1 “will be a challenge as we start 2026.” The credits are being reduced by the One Big Beautiful Bill Act signed into law in July.
Expenses in the third quarter included about $100 million of incremental depreciation related to next year’s planned shutdown of the company’s refinery in Benicia, Calif. Investor relations Vice President Homer Bhullar said the closure is expected to continue impacting results by about 25 cents per share for the next two quarters.
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