Back to top

Image: Shutterstock

Valero (VLO) Q2 Earnings Beat Estimates, Revenues Decline Y/Y

Read MoreHide Full Article

Valero Energy Corporation (VLO - Free Report) has reported second-quarter 2023 adjusted earnings of $5.40 per share, beating the Zacks Consensus Estimate of $5.08 per share. However, the bottom line significantly declined from $11.36 in the year-ago quarter.

Total quarterly revenues dipped from $51,641 million in the prior-year quarter to $34,509 million. The top line also lagged the Zacks Consensus Estimate of $34,817 million.

Better-than-expected quarterly earnings were primarily driven by increased renewable diesel sales volumes and a decline in total costs of sales. The positives were partially offset by a lower refining margin per barrel of throughput.

Valero Energy Corporation Price, Consensus and EPS Surprise

 

Valero Energy Corporation Price, Consensus and EPS Surprise

Valero Energy Corporation price-consensus-eps-surprise-chart | Valero Energy Corporation Quote

Segmental Performance

Adjusted operating income in the Refining segment was $2,433 million, significantly declining from $6,122 million in the year-ago quarter. A lower refining margin per barrel of throughput affected the segment.

In the Ethanol segment, Valero reported an adjusted operating profit of $128 million, up from $79 million in the year-ago quarter. Higher ethanol production volumes aided the segment.

Operating income in the Renewable Diesel segment increased to $440 million from $152 million in the year-ago quarter. Renewable diesel sales volumes increased to 4,400 thousand gallons per day from 2,182 thousand gallons per day a year ago.

Throughput Volumes

In the quarter, Valero’s refining throughput volumes were 2,969 thousand barrels per day (MBbls/d), marginally up from the 2,962 MBbls/d reported in the second quarter of 2022.

In terms of feedstock composition, sweet crude, medium/light sour crude and heavy sour crude accounted for 49.2%, 10.8% and 15.8% of the total volume, respectively. The remaining volume came from residuals, other feedstock, and blendstocks and others.

The Gulf Coast contributed 60.6% to the total throughput volume. Mid-Continent, North Atlantic and West Coast regions accounted for 14.6%, 15.6% and 9.2%, respectively, of the total throughput volume.

Throughput Margins

The refining margin per barrel of throughput significantly declined to $15.62 from the year-ago level of $30.01. Refining operating expenses per barrel of throughput was $4.46 compared with $5.20 in the year-ago quarter.

Depreciation and amortization expenses increased to $2.16 a barrel from $2.10 in the prior-year quarter. As such, Valero’s adjusted refining operating income was $9 per barrel of throughput compared with $22.71 in the prior-year quarter.

Cost of Sales

Valero’s total cost of sales declined to $31,528 million in the second quarter from the year-ago figure of $45,162 million primarily due to lower material costs.

Capital Investment & Balance Sheet

The second-quarter capital investment was $458 million. Of the total, $382 million was allotted for sustaining the business.

At the second-quarter end, the company had cash and cash equivalents of $5,075 million. As of Jun 30, 2023, it had total debt and finance lease obligations of $11,323 million.

Zacks Rank & Stocks to Consider

Valero currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked players in the energy sector are Oceaneering International, Inc. (OII - Free Report) , Global Partners (GLP - Free Report) and Evolution Petroleum Corporation (EPM - Free Report) , currently sporting a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

One of the leading suppliers of integrated technology solutions, Oceaneering boasts an impressive portfolio of diversified products and services. OII has a Zacks Style Score of B for Momentum.

Oceaneering has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The consensus estimate for OII’s 2023 and 2024 earnings per share is pegged at $1.12 and $1.29, respectively.

Global Partners is a leading operator of gasoline stations and convenience stores. Over the past 60 days, GLP has witnessed upward earnings estimate revisions for 2023 and 2024, respectively.

The Zacks Consensus Estimate for Global Partners’ 2023 and 2024 earnings per share is pegged at $3.85 and $3.61, respectively. GLP currently has a Zacks Style Score of A for Value and Momentum.

Evolution Petroleum is an independent energy company. EPM has a Zacks Style Score of A for Growth.

Evolution Petroleum has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The consensus estimate for EPM’s 2023 and 2024 earnings per share is pegged at $1.11 and $1.08, respectively.

Published in