Valero profit surges as refining margin more than doubles
(Reuters) - Valero Energy Corp's quarterly earnings blew past Wall Street expectations on Tuesday, as margins strengthened thanks to rising demand for fuel and as worldwide supply tightened following Russia's invasion of Ukraine.
Valero's quarterly refining margin more than doubled to $3.21-B from a year earlier. Global fuel demand has rebounded to near pre-pandemic levels, while supply of refined products like diesel and jet fuel have tightened sharply due to the Russia-Ukraine war.
In addition, numerous refineries worldwide have closed, to the benefit of facilities that are still operating.
Valero, the first major U.S. refiner to post quarterly results, said its total refinery throughput volumes averaged 2.8 MMbpd in the quarter ended March 31, 390,000 bpd higher than a year earlier.
The company's refining segment posted adjusted operating income of $1.47-B, compared with an adjusted loss of $506 million in the year-ago period. Its per-barrel refining margin was $12.74 in the first quarter, compared with $6.91 for the year-ago period.
Valero reported a quarterly adjusted profit of $2.31 per share, far ahead of analysts' average estimate of $1.66, according to Refinitiv IBES data.
"The fundamentals that drove strong results in the first quarter, particularly in March, continue to provide a positive backdrop for refining margins," Chief Executive Officer Joe Gorder said in a statement.
The company's shares, which have gained nearly 34% so far this year, rose as much as 3.2% in premarket trading.
Refiners have also benefited from a surge in natural gas prices in Europe, which has reduced distillate inventories worldwide.
Rivals Phillips 66 and Marathon Petroleum Corp are also expected to post a quarterly profit compared to year-ago losses.
(Reporting by Rithika Krishna in Bengaluru Editing by Shailesh Kuber and Mark Potter)
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