Valero Energy Q1 Results Top Estimates

(RTTNews) - Petroleum refiner Valero Energy Corp. (VLO) reported Tuesday a profit for the first quarter that increased from last, helped mainly by lower costs and operating expenses as well as operating revenue growth. Both earnings per share and quarterly operating revenues topped analysts' expectations.

"We've had a strong start to the year, and we achieved our best first quarter earnings per share since 2007. We continued to execute on our crude oil supply strategy of growing access to and processing more volumes of cost-advantaged North American crude oil," Chairman and CEO Bill Klesse said in a statement.

Valero Energy announced in early March that Klesse has chosen to step down with effect from May 1, but would continue as a Valero director and chairman of the board. Klesse became CEO in 2005 and was named Board Chairman in 2007. He spent his entire 45-year career at Valero and its predecessor companies.

The company said Joe Gorder, who was appointed as Valero's President and Chief Operating Officer in 2012, was elected to the CEO role, effective May 1 and has also been elected a director by the board.

The San Antonio, Texas-based company reported net income of $828 million or $1.54 per share for the first quarter, higher than $654 million or $1.18 per share in the prior-year quarter.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $1.38 per share for the quarter. Analysts' estimate typically excludes special items.

Operating revenues for the quarter edged up to $33.66 billion from $33.47 billion in the same quarter last year, and topped four Wall Street analysts' consensus estimate of $32.95 billion.

Total operating income for the quarter increased to $1.35 billion from $1.06 billion in the prior-year quarter. The company noted that increases in the refining and ethanol divisions were partly offset by a reduction from the spinoff of the retail segment, CST Brands, Inc., on May 1, 2013.

Valero's refining segment operating income of $1.28 billion was higher that last year's $1.21 billion, mainly due to higher throughput margin and volumes, partially offset by higher energy costs and depreciation expense. Refining throughput volumes averaged 2.7 million barrels per day, an increase of 135,000 barrels per day from the year-ago quarter.

Valero's ethanol segment operating income was $243 million, sharply higher than $14 million in the prior-year quarter.

Total costs and expenses were $32.31 billion, down slightly from $32.41 billion last year.

"We expect our well-positioned business will continue to benefit from the increased North American oil and gas production. Plus, as our economy continues to recover, fuel demand will increase from the lows we've seen since the 'Great Recession.' U.S. gasoline demand and margins look positive as we enter the summer driving season," Klesse added.

In Tuesday's regular trading session, VLO is currently trading at $57.70, down $0.27 or 0.47% on a volume of 2.0 million shares.