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Valero Energy's Q4 Earnings Beat on Higher Renewable Diesel Margins
VLOValero(VLO) ZACKS·2025-01-30 18:20

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 3.55inthesamequarterlastyear[1]−Totalquarterlyrevenuesdecreasedto3.55 in the same quarter last year [1] - Total quarterly revenues decreased to 30,756 million from 35,414millionyear−over−year,althoughitsurpassedtheZacksConsensusEstimateof35,414 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 30,127millionfrom30,127 million from 33,540 million in the prior-year quarter, also below the estimate of 30,590.1million,mainlyduetoareductioninthecostofmaterials[9]SegmentalPerformance−AdjustedoperatingincomeintheRefiningsegmentwas30,590.1 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 1,577millionyear−over−year,andmissedtheestimateof1,577 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 20million,downfrom20 million, down from 205 million in the prior-year quarter, missing the estimate of 84.2millionduetoadropinethanolmargins[4]−TheRenewableDieselsegmentreportedanoperatingincomeof84.2 million due to a drop in ethanol margins [4] - The Renewable Diesel segment reported an operating income of 170 million, up from 84millionyear−over−year,benefitingfromhigherrenewabledieselmarginsdespiteadeclineinsalesvolumeto3,356thousandgallonsperdayfrom3,773thousandgallons[5]ThroughputVolumesandMargins−Refiningthroughputvolumestotaled2,995thousandbarrelsperday,consistentwiththeyear−agofigureandabovetheestimateof2,688thousandbarrelsperday[6]−Therefiningmarginperbarrelofthroughputdecreasedto84 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 12.89year−over−year,whilerefiningoperatingexpensesperbarrelwere12.89 year-over-year, while refining operating expenses per barrel were 4.67 compared to 4.99intheprior−yearquarter[8]CapitalInvestmentandBalanceSheet−Capitalinvestmentforthefourthquartertotaled4.99 in the prior-year quarter [8] Capital Investment and Balance Sheet - Capital investment for the fourth quarter totaled 547 million, with 452millionallocatedforsustainingthebusiness[11]−Attheendofthefourthquarter,thecompanyhadcashandcashequivalentsof452 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 8.1billion,andfinanceleaseobligationsof8.1 billion, and finance lease obligations of 2.4 billion [11]