Valero Energy beats quarterly profit estimates on lower costs

Refiner Valero Energy beat fourth-quarter profit and revenue estimates on Thursday, helped by lower costs and steady output.

Shares of the company rose 1.4% in premarket trading after the company also said profits doubled in its renewable diesel division and costs fell 10.2% from a year earlier.

JP Morgan analysts said that Valero's operational expenditure fell in all the segments compared to its estimates, barring the Gulf Coast.

Analysts also noted that the refining and renewable diesel segments performed better than they had expected.

"The refining outperformance was driven by a combination of higher throughput and margins," said analysts at Scotiabank, highlighting that this was despite a challenging margin environment during the quarter.

Fuel demand has slowed across the globe and weighed heavily on oil and fuel markets in 2024.

Valero's net income fell nearly 77% in the quarter to $281 million, or 88 cents per share, from a year earlier. Its refining margins also dropped 34.5%.

The company, however, posted steady throughput at 3 million barrels per day, which helped it report adjusted earnings of 64 cents per share, surpassing analysts' estimate of 7 cents per share, according to data compiled by LSEG.

Revenue of $30.75 billion also beat expectations of $30.2 billion.

The company said it was progressing with its FCC Unit optimization project at the St. Charles Refinery that will enable it to increase the yield of high-value products.

The project is estimated to cost $230 million and is expected to be completed in 2026.