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Last quarter, the leading refining player delivered a positive earnings surprise of 9.4%, courtesy of higher throughput margin. Moreover, earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average positive surprise being 10.3%.
Which Way Are Estimates Treading?
Let’s take a look at the estimate revisions to get a clear picture on the stock before the earnings release.
The Zacks Consensus Estimate for first-quarter 2018 earnings of 95 cents has been revised downward over the last 30 days, with five firms being bearish and two firms taking a bullish stance. The consensus estimate reflects year-over-year improvement of about 39.7%.
Analysts polled by Zacks expect revenues of $23,527 million for the first quarter, up 8.1% from the year-ago quarter.
Factors to Consider
Among independent refiners, Valero Energy has the most diverse refinery base. The Zacks Consensus Estimate for operating income of VLP segment for the first quarter is pegged at $80 million, unchanged from the preceding quarter.
The company’s strong balance sheet as reflected from the rising cash balance since 2015 is encouraging.
Also, the Zacks Consensus Estimate for throughput margin per barrel from Valero Energy’s refining operations is peggedat $8.8, higher than $8.75 in the preceding quarter. Higher expected throughput margin islikely to offset lower projected profit for refining segment.
The Zacks Consensus Estimate for operating income of refining segment for the first quarter is pegged at $783 million, down from $982 million reported in the preceding quarter.
The Zacks Consensus Estimate for operating income of ethanol segment for the first quarter is pegged at $34.9 million, down from $37 million reported in the preceding quarter.
Earnings Whispers
Our proven model does not show that Valero Energy is likely to beat earnings this quarter. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Earnings ESP for the company is -4.58%. This is because the Most Accurate estimate is 91 cents, while the Zacks Consensus Estimate is pegged at 95 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Valero Energy carries a Zacks Rank #3.
Conversely, we caution against all Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Q1 Price Performance
During the quarter, Valero Energy’s shares inched up 0.9% against the industry’s 2.7% decline.
Stocks to Consider
Though earnings beat looks uncertain for Valero Energy, here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to post an earnings beat this quarter:
Based in Houston, United States, Solaris Oilfield Infrastructure, Inc. (SOI - Free Report) manufactures as well as provides patented mobile proppant management systems which unload, store and deliver proppant at oil and natural gas well sites. The company has an Earnings ESP of +6.28% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Continental Resources, Inc is an independent oil and natural gas exploration and production company. The company has an Earnings ESP of +10.56% and sports a Zacks Rank #3.
Houston, TX-based EOG Resources, Inc (EOG - Free Report) is a major independent oil and gas exploration and production company. The company has an Earnings ESP of +10.94% and a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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What to Expect From Valero Energy (VLO) in Q1 Earnings?
Valero Energy Corporation (VLO - Free Report) is set to report first-quarter 2018 results on Apr 26, before the market opens.
Valero Energy Corporation Price and EPS Surprise
Valero Energy Corporation Price and EPS Surprise | Valero Energy Corporation Quote
Last quarter, the leading refining player delivered a positive earnings surprise of 9.4%, courtesy of higher throughput margin. Moreover, earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average positive surprise being 10.3%.
Which Way Are Estimates Treading?
Let’s take a look at the estimate revisions to get a clear picture on the stock before the earnings release.
The Zacks Consensus Estimate for first-quarter 2018 earnings of 95 cents has been revised downward over the last 30 days, with five firms being bearish and two firms taking a bullish stance. The consensus estimate reflects year-over-year improvement of about 39.7%.
Analysts polled by Zacks expect revenues of $23,527 million for the first quarter, up 8.1% from the year-ago quarter.
Factors to Consider
Among independent refiners, Valero Energy has the most diverse refinery base. The Zacks Consensus Estimate for operating income of VLP segment for the first quarter is pegged at $80 million, unchanged from the preceding quarter.
The company’s strong balance sheet as reflected from the rising cash balance since 2015 is encouraging.
Also, the Zacks Consensus Estimate for throughput margin per barrel from Valero Energy’s refining operations is peggedat $8.8, higher than $8.75 in the preceding quarter. Higher expected throughput margin islikely to offset lower projected profit for refining segment.
The Zacks Consensus Estimate for operating income of refining segment for the first quarter is pegged at $783 million, down from $982 million reported in the preceding quarter.
The Zacks Consensus Estimate for operating income of ethanol segment for the first quarter is pegged at $34.9 million, down from $37 million reported in the preceding quarter.
Earnings Whispers
Our proven model does not show that Valero Energy is likely to beat earnings this quarter. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Earnings ESP for the company is -4.58%. This is because the Most Accurate estimate is 91 cents, while the Zacks Consensus Estimate is pegged at 95 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Valero Energy carries a Zacks Rank #3.
Conversely, we caution against all Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Q1 Price Performance
During the quarter, Valero Energy’s shares inched up 0.9% against the industry’s 2.7% decline.
Stocks to Consider
Though earnings beat looks uncertain for Valero Energy, here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to post an earnings beat this quarter:
Based in Houston, United States, Solaris Oilfield Infrastructure, Inc. (SOI - Free Report) manufactures as well as provides patented mobile proppant management systems which unload, store and deliver proppant at oil and natural gas well sites. The company has an Earnings ESP of +6.28% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Continental Resources, Inc is an independent oil and natural gas exploration and production company. The company has an Earnings ESP of +10.56% and sports a Zacks Rank #3.
Houston, TX-based EOG Resources, Inc (EOG - Free Report) is a major independent oil and gas exploration and production company. The company has an Earnings ESP of +10.94% and a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>