Valero Energy Earnings Tumble on Tighter Margins
04 May 2016 - 3:30AM
Dow Jones News
Valero Energy Corp. reported its profit nearly halved in the
first quarter of the year as the refiner's margins contracted on
depressed gasoline and crude oil prices.
Shares slipped 2.9% to $58.10 midday.
Chief Executive Joe Gorder said the company's pursuit of "safe,
reliable, low-cost operations" delivered solid operating
performance in the quarter despite lower product margins.
In Valero's refining business, operating earnings skidded 56% to
$695 million, owing to weaker distillate margins given high
refining industry production levels and a warm winter. Operating
earnings in the ethanol segment fell 25% to $9 million as
production volumes were essentially flat. The company said it
expects recent increases in crude oil and gasoline prices should
improve ethanol margins in the second quarter.
Mr. Gorder said the company is optimistic about product
demand.
"Here in the U.S., distillate inventories have shown favorable
reductions recently, and the summer driving season is quickly
approaching, which should support gasoline margins," he said. "We
also expect the strong export demand we experienced in the first
quarter to continue."
Overall, Valero reported a profit of $495 million, or $1.05 a
share, down from $964 million, or $1.87 a share, a year earlier.
Adjusted earnings fell to 60 cents a share from $1.87 in the
quarter last year. Revenue skidded 26% to $15.71 billion.
Analysts polled by Thomson Reuters had expected adjusted
earnings of 66 cents a share on revenue of $13 billion.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
May 03, 2016 13:15 ET (17:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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