Reuters US Business
By Vallari Srivastava
(Reuters) -U.S. refiner Valero Energy beat Wall Street expectations for third-quarter profit on Thursday, on the back of a rebound in refining margins and record refinery throughput in the Gulf Coast and North Atlantic regions.
Shares of the company, which kicked off the earnings season for U.S. refiners, rose 3% to $166.51 in premarket trading.
Refining margins have recovered from multi-year lows in 2024, following two years of bumper profits, as supply shortages tied to geopolitical tensions in Ukraine supported stronger pricing.
U.S. refinery margins, measured by the 3-2-1 crack spread, in the third quarter rose nearly 29% on average from a year earlier, driven by robust diesel and gasoline margins amid low inventories.
Valero CEO Lane Riggs said the company achieved refinery throughput utilization of 97%, with refineries in the Gulf Coast and North Atlantic regions setting all-time highs.
Wall Street analysts said Valero's refining results exceeded expectations and added the company was well-positioned to benefit from strong margins and widening crude differentials as product markets were expected to remain tight.
The company's average throughput volume rose to 3.1 million barrels per day in the quarter, from 2.9 million bpd a year earlier.
Valero's refining margin per barrel of throughput jumped over 44% to $13.14 in the quarter, compared with $9.09 a year earlier.
Operating income at Valero's ethanol segment rose over 19% to $183 million during the quarter. However, earnings were slightly offset by the renewable diesel segment, which reported an operating loss of 28 million compared with a year-ago profit.
The company posted an adjusted profit of $3.66 per share for the three months ended September 30, compared with analysts' expectations of $3.05, according to data compiled by LSEG.
(Reporting by Vallari Srivastava in Bengaluru; Editing by Krishna Chandra Eluri)
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