Valero Energy beats Q2 profit estimates as refining margins improve
Investors were expecting top U.S. refiners to report higher second-quarter profits, bouncing back from losses during the first three months of the year as unseasonably strong diesel margins boosted earnings.
Valero, the first major refiner to post results this earnings season, said its refining margin per barrel of throughput was up at $12.35 in the reported quarter, compared with $11.14 from a year earlier.
"We set a record for refining throughput rate in our U.S. Gulf Coast region in the second quarter," said CEO Lane Riggs.
The company's total throughput volumes stood at 2.9 million barrels per day (bpd) in the quarter, compared with 3.0 million bpd a year earlier.
The refining segment reported quarterly operating income of $1.3 billion, higher than last year's $1.2 billion.
However, its renewable diesel segment, consisting of the Diamond Green Diesel joint venture, reported an operating loss of $79 million for the quarter, compared with a profit of $112 million a year ago.
The company also said it was progressing with a fluid catalytic cracking unit optimization project that will enable the St. Charles Refinery to increase its high-value product yield.
The project is estimated to cost $230 million and is expected to be completed in 2026.
Valero reported a profit of $2.28 per share for the quarter ended June 30, compared with analysts' average estimate of $1.74 per share, according to data compiled by LSEG.
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