Core Viewpoint - Valero Energy has engaged with three authorized sellers of Venezuelan crude and will purchase barrels from all three of them [1] Group 1 - Valero Energy is actively expanding its crude oil sourcing by engaging with multiple sellers [1]

Financial Data and Key Metrics Changes - For Q4 2025, net income attributable to Valero stockholders was $1.1 billion, or $3.73 per share, compared to $281 million, or $0.88 per share, for Q4 2024. Adjusted net income was $1.2 billion, or $3.82 per share, for Q4 2025, compared to $207 million, or $0.64 per share, for Q4 2024 [8][9] - For the full year 2025, net income attributable to Valero stockholders was $2.3 billion, or $7.57 per share, compared to $2.8 billion, or $8.58 per share in 2024. Adjusted net income for 2025 was $3.3 billion, or $10.61 per share, compared to $2.7 billion, or $8.48 per share in 2024 [8][9] Business Segment Data and Key Metrics Changes - The refining segment reported $1.7 billion of operating income for Q4 2025, compared to $437 million for Q4 2024. Refining throughput volumes averaged 3.1 million barrels per day, achieving 98% capacity utilization [9] - The renewable diesel segment reported operating income of $92 million for Q4 2025, down from $170 million for Q4 2024, with sales volumes averaging 3.1 million gallons per day [10] - The ethanol segment reported $117 million of operating income for Q4 2025, compared to $20 million for Q4 2024, with production volumes averaging 4.8 million gallons per day [10] Market Data and Key Metrics Changes - Gasoline sales in Q4 were flat year-over-year, while distillate sales were up 13%, attributed to a change in customer mix. Exports were up both quarter-over-quarter and year-over-year [21] - The company noted a significant build in total light product inventory during November and December, which was larger than typical seasonal patterns [21][22] Company Strategy and Development Direction - The company is progressing on its $230 million FCC unit optimization project at the St. Charles Refinery, expected to begin operations in the second half of 2026 [7] - Valero's capital allocation framework prioritizes balance sheet strength, disciplined capital investments, and shareholder returns, with a commitment to a minimum annual payout ratio of 40%-50% of adjusted net cash provided by operating activities [14][17] Management's Comments on Operating Environment and Future Outlook - Management expressed a bullish outlook for refining fundamentals, expecting continued demand growth and a tight supply environment due to limited capacity additions [7][24] - The company anticipates capital investments for 2026 to be approximately $1.7 billion, focusing on sustaining the business and growth projects [14][15] Other Important Information - The company ended 2025 with $8.3 billion of total debt and $4.7 billion of cash and cash equivalents, resulting in a debt-to-capitalization ratio of 18% [14] - Shareholder cash returns totaled $1.4 billion in Q4 2025, with a payout ratio of 66% for the quarter [13] Q&A Session Summary Question: How do you view the evolution of supply and demand dynamics for light products and crack spreads going forward? - Management noted significant builds in light product inventory but attributed it to high refinery utilization rather than abnormal demand [21][22] Question: How much Venezuelan crude can be absorbed within your footprint over time? - Management indicated that Valero has historically been the largest purchaser of Venezuelan heavy crude and expects to increase processing capability due to recent upgrades [27][28] Question: How aggressive will you continue to be around buying back stock? - Management confirmed a commitment to returning excess free cash flow to shareholders through share repurchases, with a focus on maintaining a strong balance sheet [34][37] Question: What is the expected impact of the RVO and RIN prices on future earnings? - Management anticipates that policy clarity will be a tailwind for renewable diesel earnings in 2026, with expectations of higher D4 RIN prices due to increased obligations [48][60]

Financial Data and Key Metrics Changes - For Q4 2025, net income attributable to Valero stockholders was $1.1 billion, or $3.73 per share, compared to $281 million, or $0.88 per share, for Q4 2024. Adjusted net income was $1.2 billion, or $3.82 per share, for Q4 2025, compared to $207 million, or $0.64 per share, for Q4 2024 [8] - For the full year 2025, net income attributable to Valero stockholders was $2.3 billion, or $7.57 per share, compared to $2.8 billion, or $8.58 per share in 2024. Adjusted net income for 2025 was $3.3 billion, or $10.61 per share, compared to $2.7 billion, or $8.48 per share in 2024 [8] Business Segment Data and Key Metrics Changes - The refining segment reported $1.7 billion of operating income for Q4 2025, compared to $437 million for Q4 2024. Refining throughput volumes averaged 3.1 million barrels per day, achieving 98% capacity utilization [9] - The renewable diesel segment reported operating income of $92 million for Q4 2025, down from $170 million for Q4 2024, with sales volumes averaging 3.1 million gallons per day [9] - The ethanol segment reported $117 million of operating income for Q4 2025, compared to $20 million for Q4 2024, with production volumes averaging 4.8 million gallons per day [10] Market Data and Key Metrics Changes - The company noted that gasoline sales in Q4 were flat year-over-year, while distillate sales were up 13%, attributed to a change in customer mix [21] - Exports were up both quarter-over-quarter and year-over-year, indicating strong demand in the product market despite inventory builds [21] Company Strategy and Development Direction - The company is progressing on its FCC unit optimization project at the St. Charles Refinery, a $230 million initiative expected to enhance high-valued product yields, with operations anticipated to begin in the second half of 2026 [7] - Valero's capital allocation framework prioritizes balance sheet strength, disciplined capital investments, and shareholder returns, with a commitment to a minimum annual payout ratio of 40%-50% of adjusted net cash provided by operating activities [17] Management's Comments on Operating Environment and Future Outlook - Management expressed a bullish outlook for refining fundamentals, expecting continued demand growth and a tight supply environment due to limited capacity additions [7] - The company anticipates refining throughput volumes to fall within specified ranges for Q1 2026, with cash operating expenses expected to be approximately $5.17 per barrel [15] Other Important Information - The company ended Q4 2025 with $8.3 billion of total debt and $4.7 billion of cash and cash equivalents, resulting in a debt-to-capitalization ratio of 18% [14] - Shareholder cash returns totaled $1.4 billion in Q4 2025, with a payout ratio of 66% for the quarter [13] Q&A Session Summary Question: How do you view the evolution of supply and demand dynamics for light products and crack spreads going forward? - Management noted significant builds in light product inventory in late 2025, with good domestic demand and exports up, but high refinery utilization contributed to the inventory build [21][22] Question: How much Venezuelan crude can be absorbed within your footprint over time? - Management indicated that Valero has historically been the largest purchaser of Venezuelan heavy crude and expects to increase processing capability significantly due to recent upgrades [28] Question: How aggressive will you continue to be around buying back stock? - Management emphasized a commitment to returning excess free cash flow to shareholders through share repurchases, maintaining a strong balance sheet and disciplined capital allocation [35][37] Question: What is the expected impact of the RVO and RIN prices on renewable diesel earnings? - Management anticipates a favorable policy environment for renewables in 2026, which should lead to improved earnings compared to 2025 [50][60]

Core Insights - Valero Energy Corporation reported a strong fourth-quarter performance, with adjusted net income of $1.2 billion, or $3.82 per share, surpassing analyst estimates of $3.27 per share [1] Group 1: Financial Performance - The refining margin per barrel of throughput increased significantly to $13.61 in Q4 2025 from $8.44 in Q4 2024 [2] - For the full year 2025, Valero's refining margin per barrel rose to $12.29, up from $10.62 in 2024 [2] - Adjusted operating income in the refining segment soared to $1.7 billion in Q4 2025, compared to $441 million in Q4 2024 [3] Group 2: Throughput Volumes - Total throughput volumes increased to 3.113 million barrels per day (bpd) in Q4 2025, up from 2.995 million bpd in Q4 2024 [2] - Crude throughput volumes for the full year 2025 rose to 2.988 million bpd, compared to 2.912 million bpd in 2024 [3] Group 3: Market Dynamics - Valero has reportedly purchased Venezuelan crude from Vitol Group and Trafigura, which are authorized to market Venezuela's oil [4] - Valero, along with Marathon and Phillips 66, operates complex refineries on the Gulf Coast designed to process heavy crude from Venezuela [4] - Analysts from BofA indicated that Valero could potentially process an additional 200,000 bpd of Venezuelan crude in the near term [4]

Valero Energy (NYSE:VLO) Q4 2025 Earnings call January 29, 2026 10:00 AM ET Speaker0Greetings and welcome to Valero Energy Corp's fourth quarter 2025 earnings call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Donovan, ...

分组1 - Valero Energy reported quarterly earnings of $3.82 per share, exceeding the Zacks Consensus Estimate of $3.22 per share, and significantly up from $0.64 per share a year ago, representing an earnings surprise of +18.57% [1] - The company achieved revenues of $30.37 billion for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 8.24%, although this is a slight decrease from year-ago revenues of $30.76 billion [2] - Valero Energy has consistently outperformed consensus EPS estimates over the last four quarters, achieving this four times [2] 分组2 - The stock has gained approximately 13% since the beginning of the year, outperforming the S&P 500, which has gained 1.9% [3] - The current consensus EPS estimate for the upcoming quarter is $1.74 on revenues of $27.51 billion, and for the current fiscal year, it is $12.21 on revenues of $110.51 billion [7] - The Zacks Industry Rank indicates that the Oil and Gas - Refining and Marketing sector is currently in the bottom 25% of over 250 Zacks industries, which may impact stock performance [8]

Financial Performance - Valero reported net income attributable to stockholders of $1.1 billion, or $3.73 per share, for Q4 2025, a significant increase from $281 million, or $0.88 per share, in Q4 2024[2]. - For the full year 2025, net income attributable to stockholders was $2.3 billion, or $7.57 per share, compared to $2.8 billion, or $8.58 per share, in 2024[3]. - Adjusted net income for Q4 2025 was $1.2 billion, or $3.82 per share, up from $207 million, or $0.64 per share, in Q4 2024[4]. - Net income attributable to Valero Energy Corporation stockholders for the three months ended December 31, 2025, was $1,134 million, compared to $281 million in the same period of 2024, showing a significant increase of 303.2%[30]. - Adjusted net income attributable to Valero Energy Corporation stockholders for the year ended December 31, 2025, was $3,292 million, compared to $2,739 million in 2024, representing an increase of 20.2%[30]. - Earnings per common share for the year ended December 31, 2025, was $7.57, down from $8.58 in 2024, a decrease of approximately 11.8%[30]. Segment Performance - Refining segment reported operating income of $1.7 billion for Q4 2025, compared to $437 million in Q4 2024, with throughput averaging 3.1 million barrels per day[5]. - Renewable Diesel segment reported operating income of $92 million for Q4 2025, down from $170 million in Q4 2024, with sales volumes averaging 3.1 million gallons per day[6]. - Ethanol segment reported operating income of $117 million for Q4 2025, compared to $20 million in Q4 2024, with production averaging 4.8 million gallons per day[7]. - Operating income for the refining segment was $4,040 million for the year ended December 31, 2025, compared to $3,971 million in 2024, indicating an increase of 1.7%[28]. - The company’s operating income (loss) by segment for the year ended December 31, 2025, was $3,181 million, compared to $3,755 million in 2024, reflecting a decrease of 15.3%[28]. Revenue and Costs - Total revenues for the year ended December 31, 2025, were $122,687 million, a decrease from $129,881 million in 2024, representing a decline of approximately 5.5%[28]. - The cost of materials and other for the year ended December 31, 2025, was $101,096 million, up from $110,616 million in 2024, reflecting a decrease of about 8.6%[28]. - Total cost of sales for the year ended December 31, 2025, was $117,255 million, compared to $125,076 million in 2024, indicating a reduction of about 6.3%[28]. - Operating expenses (excluding depreciation and amortization) for the Refining segment were $5.426 billion for the year ended December 31, 2025, an increase from $4.946 billion in 2024[65]. Capital Expenditures and Investments - Capital investments totaled $412 million in Q4 2025, with $368 million allocated for sustaining the business[11]. - Capital expenditures attributable to Valero for the year ended December 31, 2025, were $1,797 million, a decrease of 4.8% from $1,888 million in 2024[58]. - The expected capital investments attributable to Valero for the year ending December 31, 2026, are projected to be $1,700 million[58]. Debt and Equity - Valero's total debt at the end of 2025 was $8.3 billion, with cash and cash equivalents of $4.7 billion, resulting in a debt to capitalization ratio of 18%[14]. - Total debt and finance lease obligations increased to $10,619 million as of December 31, 2025, compared to $10,463 million in 2024, marking an increase of 1.5%[56]. - Valero's stockholders' equity decreased to $23,725 million as of December 31, 2025, from $24,512 million in 2024, a decline of 3.2%[56]. Margins and Pricing - The refining margin for the year ended December 31, 2025, reached $13,403 million, compared to $11,325 million in 2024, indicating an increase of 18.4%[32]. - Refining margin per barrel of throughput for Q4 2025 was $13.61, compared to $8.44 in Q4 2024, showing an increase of 61.5%[39]. - The average product margin for U.S. Gulf Coast ultra-low-sulfur diesel less Brent increased to $23.86 per barrel in Q4 2025, compared to $12.41 in Q4 2024, reflecting a significant increase of 92.5%[53]. - The average price for New York Mercantile Exchange ultra-low-sulfur diesel was $2.33 per gallon in Q4 2025, compared to $2.23 in Q4 2024, indicating an increase of 4.5%[54]. - The average price for California Low-Carbon Fuel Standard carbon credit was $53.53 per metric ton in Q4 2025, down from $72.27 in Q4 2024, representing a decrease of 26%[54]. Asset Impairment and Losses - The company reported an asset impairment loss of $1,131 million for the year ended December 31, 2025[30]. - The asset impairment loss for the Benicia and Wilmington refineries was recognized at a combined total of $1.1 billion due to non-recoverable carrying values[63]. - Incremental depreciation expense related to the Benicia Refinery was approximately $300 million for the year ended December 31, 2025[63]. - The company plans to cease refining operations at the Benicia Refinery by the end of April 2026[63]. Other Notable Items - Total stockholder cash returns were $1.4 billion in Q4 2025, resulting in a payout ratio of 66% of adjusted net cash provided by operating activities[12]. - A current income tax benefit of $79 million was recognized in December 2024 for the tax credit related to cellulosic ethanol produced and sold from 2020 through 2024[63]. - The employee retention and separation costs related to the Benicia Refinery amounted to $50 million for the year ended December 31, 2025[63]. - Navigator Energy Services canceled a large-scale carbon capture project, resulting in a charge of $29 million recognized in the year ended December 31, 2024[63].

Core Insights - Valero Energy Corporation reported a net income of $1.1 billion, or $3.73 per share, for Q4 2025, a significant increase from $281 million, or $0.88 per share, in Q4 2024 [1] - Adjusted net income for Q4 2025 was $1.2 billion, or $3.82 per share, excluding certain adjustments [1] Financial Performance - The net income attributable to Valero stockholders increased by approximately 292% year-over-year from Q4 2024 to Q4 2025 [1] - The adjusted net income also reflects a strong performance, indicating robust operational efficiency and profitability [1]

Core Insights - Valero Energy Corporation (VLO) has outperformed Phillips 66 (PSX) over the past year, with a stock price increase of 32.7% compared to PSX's 15.9% gain [1] - Both companies are positioned to benefit from the current softness in crude oil prices, which is expected to enhance refining margins [4][6] Group 1: Valero Energy Corporation (VLO) - VLO's operational flexibility allows its refineries to adjust product yields based on market conditions, providing a strategic advantage [4] - The current market environment is expected to support strong refining margins, aiding VLO's profitability despite the cyclical nature of the refining industry [5] - VLO is more sensitive to refining margins and can benefit when crude prices are weak, making it attractive to investors who are comfortable with higher volatility [13] Group 2: Phillips 66 (PSX) - PSX's diversified business model across midstream, chemicals, and renewables provides greater stability and lower volatility in cash flows [6][7] - The company is focusing on streamlining its asset base through targeted divestitures and strategic acquisitions, such as the EPIC NGL acquisition, to enhance long-term earnings visibility [8] - PSX trades at a higher EV/EBITDA of 14.44X compared to VLO's 8.83X, indicating investor preference for its diversified model [12]

Wall Street analysts expect Valero Energy (VLO) to post quarterly earnings of $3.19 per share in its upcoming report, which indicates a year-over-year increase of 398.4%. Revenues are expected to be $28.9 billion, down 6% from the year-ago quarter.Over the last 30 days, there has been a downward revision of 26.1% in the consensus EPS estimate for the quarter, leading to its current level. This signifies the covering analysts' collective reconsideration of their initial forecasts over the course of this time ...