By Chelsey Dulaney
Valero Energy Corp. saw its revenue plunge 37% in the first
three months of the year, though results still exceeded Wall Street
expectations on steep cost cuts and strength in its refining
division.
Valero on Tuesday reported a first-quarter profit of $964
million, or $1.87 a share, up from $828 million, or $1.55 a share,
a year earlier.
Revenue fell to $21.3 billion from $33.7 billion.
Analysts polled by Thomson Reuters had projected earnings of
$1.67 a share on revenue of $15.4 billion.
Valero has seen higher margins recently, helping to offset the
impact of lower discounts of sweet and sour crude versus Brent.
In the latest quarter, Valero said its refining segment's
throughput volumes averaged 2.7 million barrels a day, an increase
of 9,000 barrels a day from a year ago. Operating income in the
refining unit improved to $1.6 billion from $1.3 billion a year
ago. The increase was driven by stronger gasoline and secondary
product margins relative to Brent crude oil and lower natural gas
costs.
In addition, expenses fell to $19.8 billion from $32.3 billion a
year ago. The company said it is operating within its $2.65 billion
capital budget.
In the ethanol segment, operating income fell to $12 million
from $243 million a year ago due to lower gasoline and ethanol
prices, despite a drop in corn prices.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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