Refining Giant Valero Tops Q4 Estimates Despite Earnings Slump

Refining Giant Valero Tops Q4 Estimates Despite Earnings Slump | OilPrice.com

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Breaking News:

ByCharles Kennedy– Jan 30, 2025, 9:30 AM CST
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Valero Energy Corporation (NYSE: VLO) booked higher-than-expected earnings for the fourth quarter despite a widely anticipated slump in profits for the last quarter of 2024 and the full year.

Resilient refining throughput and increased earnings in the renewable diesel division helped Valero post an earnings beat for Q4, even as its adjusted earnings per share plunged to $0.64 from $3.57 EPS for the same period of 2023.

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The analyst consensus estimate for Q4 2024 was for earnings per share of just $0.07, according to estimates compiled by The Wall Street Journal.

For the full year 2024, Valero’s adjusted net income came in at $2.7 billion, or $8.48 per share, significantly down compared to $8.9 billion, or $24.96 per share, in 2023.

The lower earnings were expected by industry analysts as refining margins began to decline toward the end of 2023 and remained depressed throughout 2024.

Following record refining margins and booming profits in 2022 and early 2023, the U.S. and global fuel markets started to normalize in the latter half of 2023 and refining margins began to ease from the record highs seen in the immediate aftermath of the Russian invasion of Ukraine.

Refining margins for U.S. refiners slumped to multi-year lows amid tepid fuel demand and increased global fuel supply.

The refining industry is witnessing the end of the supercycle of huge profits and record margins that began with the post-pandemic surge in demand and the war- and sanctions-related supply disruptions.

Valero’s adjusted refining margin per barrel of throughput plummeted to $1.60 in the fourth quarter of 2024, from $5.72 for the same period of the prior year.

Full-year 2024 adjusted refining margin per barrel of throughput fell nearly three times, to $3.74, from $10.60 for 2023.

Still, Valero managed to beat consensus estimates for Q4 2024 as its renewable diesel division saw operating income double to $170 million from a year earlier, and total throughput volumes remained steady at 2.995 million barrels per day (bpd).  

By Charles Kennedy for Oilprice.com

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