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 ...

Core Viewpoint - Valero Energy Corporation (VLO) is expected to report a significant increase in fourth-quarter earnings, with a consensus estimate of $3.19 per share, reflecting a 398.4% year-over-year improvement, despite a projected revenue decline of 6% to $28.9 billion [2][5]. Earnings Performance - VLO has consistently exceeded earnings estimates in the past four quarters, with an average surprise of 138.8% [3]. - The company has experienced four upward and two downward revisions in earnings estimates over the last 30 days [2]. Earnings Estimates and Trends - The current earnings estimate of $3.19 per share shows a positive trend compared to previous estimates, with a 3.57% increase over the last 30 days [3]. - The Earnings ESP (Expected Surprise Prediction) stands at -2.90%, indicating a lower likelihood of an earnings beat this quarter [4]. Market and Operational Factors - Valero is anticipated to benefit from strong refining margins due to lower crude prices, which averaged $59.64 per barrel compared to $70.74 in the prior-year quarter, thus reducing feedstock costs [5][6]. - However, the company faces challenges in the Renewable Diesel segment and increased depreciation and amortization expenses related to the closure of the Benecia Refinery, which may negatively impact earnings [7]. Stock Performance and Valuation - VLO's stock has increased by 32.4% over the past year, outperforming the industry average of 16% [8]. - The company is currently considered overvalued, with a trailing 12-month EV/EBITDA ratio of 9.02X, significantly higher than the industry average of 4.66X [9]. Company Overview - Valero Energy operates 15 refineries with a combined throughput capacity of 3.2 million barrels per day, providing operational flexibility to process various feedstocks [11]. - The company maintains a strong financial position with a low debt-to-capitalization ratio of 18% as of September 30, 2025, and utilizes excess free cash flow for share buybacks [13]. Industry Context - The refining industry is cyclical and volatile, with margins dependent on crude oil prices and demand for refined products, which can fluctuate significantly [13]. - Other refining companies like Phillips 66 and Par Pacific Holdings are also expected to benefit from favorable refining margins due to tightened supply and resilient demand for refined fuels [16].