Valero Energy Q3 Earnings Beat Estimates on Higher Refining Margins

Core Insights - Valero Energy Corporation (VLO) reported third-quarter 2025 adjusted earnings of $3.66 per share, exceeding the Zacks Consensus Estimate of $2.95, and significantly up from $1.16 per share in the same quarter last year [1][9] - Total revenues for the quarter decreased to $32.2 billion from $32.9 billion year-over-year, but still surpassed the Zacks Consensus Estimate of $29.8 billion [1][2] Financial Performance - The better-than-expected results were driven by increased refining margins, higher ethanol margins, and lower total cost of sales, although these were partially offset by a decline in renewable diesel sales volumes [2] - Adjusted operating income in the Refining segment rose to $1,665 million from $568 million year-over-year, supported by higher refining margins per barrel [3] - The Ethanol segment reported an adjusted operating profit of $183 million, up from $153 million in the prior-year quarter, aided by higher ethanol margins [3] Segment Analysis - The Renewable Diesel segment experienced an operating loss of $28 million, down from an operating income of $35 million in the previous year, with sales volumes declining to 2,717 thousand gallons per day from 3,544 thousand gallons [4] - Valero's refining throughput volumes increased to 3,087 thousand barrels per day, up from 2,884 thousand barrels per day year-over-year, exceeding estimates [5][9] - The Gulf Coast region contributed 60% to the total throughput volume, with other regions accounting for the remainder [6] Cost and Margins - Refining margins per barrel improved to $13.14 from $9.09 year-over-year, while refining operating expenses per barrel were slightly lower at $4.71 compared to $4.73 in the prior-year quarter [7] - Total cost of sales decreased to $30,396 million from $32,122 million year-over-year, attributed to a fall in the cost of materials [10] Capital Investment and Financial Position - Capital investment for the third quarter totaled $409 million, with $364 million allocated for sustaining the business [11] - As of September 30, 2025, Valero had cash and cash equivalents of $4.8 billion, total debt of $8.4 billion, and finance-lease obligations of $2.2 billion [11]