By Angela Chen
Valero Energy Corp. on Thursday said its fourth-quarter earnings
rose more than expected as higher product margins helped offset
slumping oil prices.
Results beat expectations, sending shares up about 2% in
premarket trading.
"We showed the earnings power from Valero's advantaged and
flexible system during a rapidly changing energy landscape," said
Chief Executive Joe Gorder. The higher margins offset the impacts
from lower discounts of sweet and sour crude versus Brent. Volume
rose slightly versus a year earlier as capacity utilization rate
last quarter was 98%.
In addition, Valero still has a leg up over many rivals because
it processes heavy crude from Canada and Mexico, which is even
cheaper than the benchmark U.S. oil price.
Overall, Valero posted a profit of $1.16 billion, down from
$1.29 billion a year earlier. On a per-share basis, earnings were
$2.22 a share, down from $2.38 a share a year earlier.
Excluding items such as tax benefits, earnings were $1.83, up
from $1.78 a year earlier.
Revenue fell 19% to $27.86 billion.
Analysts polled by Thomson Reuters had projected earnings of
$1.33 on revenue of $26.6 billion.
Valero said its refining segment's throughput volumes averaged
2.8 million barrels a day in the fourth quarter, an increase of
41,000 barrels a day from a year earlier. Operating income in the
refining unit grew to $1.9 billion from $1.5 million a year
earlier. However, excluding special items, operating income was
flat from the year before.
In the ethanol segment, operating income fell 49% to $158
million, due to the impact of lower gasoline and ethanol prices,
despite stable corn prices.
Shares have been up less than 1% in the past 12 months through
Wednesday's close.
Write to Angela Chen at angela.chen@dowjones.com
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