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Valero Energy's Q1 Earnings Miss on Lower Refining Margins
VLOValero(VLO) ZACKS·2025-04-24 15:10

Core Viewpoint - Valero Energy Corporation (VLO) reported a significant adjusted loss in Q1 2025, contrasting sharply with prior earnings and consensus estimates, primarily due to asset impairments and declining refining margins [1][2]. Financial Performance - The adjusted loss for Q1 2025 was 1.90pershare,comparedtoearningsof1.90 per share, compared to earnings of 3.82 in the same quarter last year [1]. - Total revenues decreased from 31,759millionintheprior−yearquarterto31,759 million in the prior-year quarter to 30,258 million, although this figure exceeded the Zacks Consensus Estimate of 28,450million[1].−AdjustedoperatingincomeintheRefiningsegmentfellto28,450 million [1]. - Adjusted operating income in the Refining segment fell to 605 million from 1.8billionyear−over−year,missingtheestimateof1.8 billion year-over-year, missing the estimate of 1,022 million [3]. - The Ethanol segment reported an adjusted operating profit of 20million,downfrom20 million, down from 39 million in the prior-year quarter, also missing the estimate of 55.1million[4].−TheRenewableDieselsegmentexperiencedanoperatinglossof55.1 million [4]. - The Renewable Diesel segment experienced an operating loss of 141 million, a decline from an operating income of 190millioninthepreviousyear[5].OperationalMetrics−Refiningthroughputvolumesincreasedto2,828thousandbarrelsperday(MBbls/d)from2,760MBbls/dyear−over−year,surpassingtheestimateof2,786MBbls/d[6].−TheGulfCoastregioncontributed59.1190 million in the previous year [5]. Operational Metrics - Refining throughput volumes increased to 2,828 thousand barrels per day (MBbls/d) from 2,760 MBbls/d year-over-year, surpassing the estimate of 2,786 MBbls/d [6]. - The Gulf Coast region contributed 59.1% to total throughput volume, with Mid-Continent, North Atlantic, and West Coast regions accounting for 16%, 17.4%, and 7.5%, respectively [7]. Margins and Costs - The refining margin per barrel of throughput decreased to 9.78 from 14.07intheprioryear,whileoperatingexpensesperbarrelroseto14.07 in the prior year, while operating expenses per barrel rose to 5.07 from 4.71[8].−Totalcostofsalesslightlydecreasedto4.71 [8]. - Total cost of sales slightly decreased to 29,751 million from 29,776millionyear−over−year,attributedtolowermaterialcosts[9].CapitalInvestmentandBalanceSheet−CapitalinvestmentforQ1totaled29,776 million year-over-year, attributed to lower material costs [9]. Capital Investment and Balance Sheet - Capital investment for Q1 totaled 660 million, with 582millionallocatedforsustainingthebusiness[10].−AsofMarch31,2025,thecompanyhadcashandcashequivalentsof582 million allocated for sustaining the business [10]. - As of March 31, 2025, the company had cash and cash equivalents of 4.6 billion, total debt of 8.5billion,andfinanceleaseobligationsof8.5 billion, and finance lease obligations of 2.3 billion [11].