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Will Refining Business Aid Valero Energy's (VLO) Q1 Earnings?

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Valero Energy Corporation (VLO - Free Report) is set to release first-quarter 2023 results on Apr 27, before the opening bell. Since the energy player has significant exposure to the refining business, a favorable refining margin per barrel of throughput is expected to have aided the quarterly performance.

Refining Business

Valero Energy’s refining operations, with 15 refineries, are spread across the United States, Canada and the United Kingdom. Considering all its refineries, the company’s combined throughput capacity is 3.2 million barrels per day. In the fourth quarter of 2022, VLO’s adjusted refining operating income was $4,355 million.

Factors to Note

In the United States, Valero Energy is a premier refining player. The diverse refining assets of VLO are centered around the prolific Gulf Coast area, which is highly profitable for the company.

However, declining throughput volumes are likely to have hurt the firm. The Zacks Consensus Estimate for VLO’s total throughput volumes is pegged at 2,758 thousand barrels per day, suggesting a decline from 2,800 thousand barrels per day in a year-ago quarter. Our estimate for total throughput volumes is 2,706.6 thousand barrels per day, also indicating a year-over-year decline.

Despite the negative, due to its premium refining operations, Valero Energy’s refining margin per barrel of throughput is likely to have increased. The Zacks Consensus Estimate for VLO’s refining margin per barrel of throughput is pegged at $21.09, suggesting a significant year-over-year improvement.

Earnings Projections

The solid refining business is likely to have aided Valero Energy’s earnings in the March quarter of 2023. The Zacks Consensus Estimate for its first-quarter earnings of $7.24 per share suggests a significant improvement year over year.

Valero Energy’s has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Our proven model doesn’t predict an earnings beat for VLO this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat, which is not the case here.

Stocks to Consider

Here are some firms worth considering, as these have the right combination of elements to beat on earnings in the upcoming quarterly reports:

Enterprise Products Partners L.P. (EPD - Free Report) currently has an Earnings ESP of +0.28% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Enterprise is scheduled to release first-quarter earnings on May 2. The Zacks Consensus Estimate for its earnings is pegged at 61 cents per share.

TechnipFMC plc (FTI - Free Report) currently has an Earnings ESP of +16.26% and a Zacks Rank #3.

TechnipFMC is scheduled to release first-quarter earnings on Apr 27. The Zacks Consensus Estimate for its earnings is pegged at 3 cents per share, suggesting an increase from the prior-year reported figure.

Magellan Midstream Partners LP has an Earnings ESP of +0.14% and is currently a Zacks #3 Ranked player.

Magellan Midstream is scheduled to release first-quarter results on May 04. The Zacks Consensus Estimate for its earnings is pegged at $1.18 per share, suggesting an increase from the prior-year reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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