Valero Energy's Q4 Earnings Beat on Higher Renewable Diesel Margins

Core Insights - Valero Energy Corporation (VLO) reported fourth-quarter 2024 adjusted earnings of 88 cents per share, exceeding the Zacks Consensus Estimate of 13 cents, but down from $3.55 in the same quarter last year [1] - Total quarterly revenues decreased to $30,756 million from $35,414 million year-over-year, although it surpassed the Zacks Consensus Estimate of $30,729 million [1] Revenue and Earnings Performance - The better-than-expected quarterly results were primarily driven by increased renewable diesel margins and lower total cost of sales, although these positives were partially offset by a decline in refining margins [2] - Total cost of sales decreased to $30,127 million from $33,540 million in the prior-year quarter, also below the estimate of $30,590.1 million, mainly due to a reduction in the cost of materials [9] Segmental Performance - Adjusted operating income in the Refining segment was $437 million, down from $1,577 million year-over-year, and missed the estimate of $1,296.5 million, impacted by significantly lower refining margins [3] - In the Ethanol segment, adjusted operating profit was $20 million, down from $205 million in the prior-year quarter, missing the estimate of $84.2 million due to a drop in ethanol margins [4] - The Renewable Diesel segment reported an operating income of $170 million, up from $84 million year-over-year, benefiting from higher renewable diesel margins despite a decline in sales volume to 3,356 thousand gallons per day from 3,773 thousand gallons [5] Throughput Volumes and Margins - Refining throughput volumes totaled 2,995 thousand barrels per day, consistent with the year-ago figure and above the estimate of 2,688 thousand barrels per day [6] - The refining margin per barrel of throughput decreased to $8.44 from $12.89 year-over-year, while refining operating expenses per barrel were $4.67 compared to $4.99 in the prior-year quarter [8] Capital Investment and Balance Sheet - Capital investment for the fourth quarter totaled $547 million, with $452 million allocated for sustaining the business [11] - At the end of the fourth quarter, the company had cash and cash equivalents of $4.7 billion, total debt of $8.1 billion, and finance lease obligations of $2.4 billion [11]