Valero Energy Corporation (VLO - Free Report) posted adjusted second-quarter 2016 earnings of $1.07 per share that surpassed the Zacks Consensus Estimate of $1.01. The bottom line, however, decreased substantially from the year-ago adjusted income of $2.66 per share. The decline was due to lower refining throughput margins in each of the company’s regions.
Total quarterly revenue of $19,584 million handily beat the Zacks Consensus Estimate of $14,427 million but plunged 22% year over year.
Throughput Volumes
During the quarter, refining throughput volumes were 2.8 million barrels per day (bbls/d). The reported figure was 19,000 bbls/d higher than the year-earlier level.
By feedstock composition, sweet crude, medium/light sour crude and heavy sour crude accounted for 42%, 18% and 13%, respectively. The remaining volumes came from residuals, other feedstock as well as blendstocks and others.
The Gulf Coast accounted for about 57% of the total volume, while the Mid-Continent, North Atlantic and West Coast regions accounted for 16%, 17% and 10%, respectively.
Throughput Margins
Company-wide throughput margins decreased to $8.93 per barrel from the year-ago level of $13.71. The decline stemmed from weak gasoline and other product margins.
Average throughput margin realized in the U.S. Gulf Coast was $8.97 per barrel as against $12.62 in the year-earlier period, in the U.S. Mid-Continent was $8.25 per barrel compared with $15.27 last year, in the North Atlantic was $7.39 per barrel as against $13.02 in the prior-year period and in the U.S. West Coast was $12.67 per barrel compared with $18.63 in the previous year.
Total operating cost per barrel was $5.22 during the quarter, down 0.6% from the prior-year figure of $5.25. Refining operating expenses per barrel were $3.51 as against $3.66 in the year-ago quarter. However, unit depreciation and amortization expenses increased year over year to $1.71 per barrel from $1.59.
Capital Expenditure & Balance Sheet
Second-quarter capital expenditure totaled $461 million, which included $164 million for turnarounds and catalyst expenditures.
At the end of the quarter under review, the company had cash and temporary cash equivalents of $4.9 billion. Valero also returned $282 million to shareholders through dividends and repurchased 7.5 million shares worth $401 million.
Valero expects its total capital spending projection for 2016 at around $2.6 billion. About $1.6 billion of the abovementioned capital spending is apportioned for stay-in-business capital and the other $1.15 billion will be used for growth investments.
Zacks Rank
Valero Energy currently carries a Zacks Rank #5 (Strong Sell). Other favorably placed players from the energy sector are Sasol Ltd (SSL - Free Report) , Dril-Quip, Inc. (DRQ - Free Report) and Murphy USA Inc (MUSA - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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Valero Energy Corporation (VLO - Free Report) posted adjusted second-quarter 2016 earnings of $1.07 per share that surpassed the Zacks Consensus Estimate of $1.01. The bottom line, however, decreased substantially from the year-ago adjusted income of $2.66 per share. The decline was due to lower refining throughput margins in each of the company’s regions.
Total quarterly revenue of $19,584 million handily beat the Zacks Consensus Estimate of $14,427 million but plunged 22% year over year.
Throughput Volumes
During the quarter, refining throughput volumes were 2.8 million barrels per day (bbls/d). The reported figure was 19,000 bbls/d higher than the year-earlier level.
By feedstock composition, sweet crude, medium/light sour crude and heavy sour crude accounted for 42%, 18% and 13%, respectively. The remaining volumes came from residuals, other feedstock as well as blendstocks and others.
The Gulf Coast accounted for about 57% of the total volume, while the Mid-Continent, North Atlantic and West Coast regions accounted for 16%, 17% and 10%, respectively.
Throughput Margins
Company-wide throughput margins decreased to $8.93 per barrel from the year-ago level of $13.71. The decline stemmed from weak gasoline and other product margins.
Average throughput margin realized in the U.S. Gulf Coast was $8.97 per barrel as against $12.62 in the year-earlier period, in the U.S. Mid-Continent was $8.25 per barrel compared with $15.27 last year, in the North Atlantic was $7.39 per barrel as against $13.02 in the prior-year period and in the U.S. West Coast was $12.67 per barrel compared with $18.63 in the previous year.
Total operating cost per barrel was $5.22 during the quarter, down 0.6% from the prior-year figure of $5.25. Refining operating expenses per barrel were $3.51 as against $3.66 in the year-ago quarter. However, unit depreciation and amortization expenses increased year over year to $1.71 per barrel from $1.59.
Capital Expenditure & Balance Sheet
Second-quarter capital expenditure totaled $461 million, which included $164 million for turnarounds and catalyst expenditures.
At the end of the quarter under review, the company had cash and temporary cash equivalents of $4.9 billion. Valero also returned $282 million to shareholders through dividends and repurchased 7.5 million shares worth $401 million.
Valero expects its total capital spending projection for 2016 at around $2.6 billion. About $1.6 billion of the abovementioned capital spending is apportioned for stay-in-business capital and the other $1.15 billion will be used for growth investments.
Zacks Rank
Valero Energy currently carries a Zacks Rank #5 (Strong Sell). Other favorably placed players from the energy sector are Sasol Ltd (SSL - Free Report) , Dril-Quip, Inc. (DRQ - Free Report) and Murphy USA Inc (MUSA - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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