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Valero Energy Corporation (VLO - Free Report) has reported fourth-quarter 2023 adjusted earnings of $3.55 per share, beating the Zacks Consensus Estimate of $2.95 per share. However, the bottom line significantly declined from the $8.45 reported in the year-ago quarter.
Total quarterly revenues dipped from $41,746 million in the prior-year quarter to $35,414 million. The top line also missed the Zacks Consensus Estimate of $37,115 million.
Better-than-expected quarterly earnings were primarily driven by a decline in total costs of sales.
Valero Energy Corporation Price, Consensus and EPS Surprise
Valero increased its quarterly cash dividend on common stock by 5% to $1.07 per share. The dividend is payable Mar 4, 2024, to shareholders of record at the close of business on Feb 1, 2024. The dividend hike raises Valero’s annualized cash dividend rate to $4.28 per share.
Segmental Performance
Adjusted operating income in the Refining segment was $1,577 million, declining from $4,355 million in the year-ago quarter and missing our estimate of $4,077 million. Declining refining throughput volumes and a lower refining margin per barrel of throughput affected the segment.
In the Ethanol segment, Valero reported an adjusted operating profit of $205 million, significantly up from $69 million in the year-ago quarter. Higher ethanol production volumes aided the segment.
Operating income in the Renewable Diesel segment declined to $84 million from $261 million in the year-ago quarter. Renewable diesel sales volumes increased to 3,773 thousand gallons per day from 2,443 thousand gallons per day a year ago and surpassed our estimate of 3,288 thousand gallons per day.
Throughput Volumes
In the fourth quarter, Valero’s refining throughput volumes were 2,995 thousand barrels per day (MBbls/d), marginally down from the 3,042 MBbls/d reported in the fourth quarter of 2022. The metric also lagged our estimate of 3,015 MBbls/d.
In terms of feedstock composition, sweet crude, medium/light sour crude and heavy sour crude accounted for 50.7%, 9% and 16.2% of the total volume, respectively. The remaining volume came from residuals, other feedstock, and blendstocks and others.
The Gulf Coast contributed 60.6% to the total throughput volume. Mid-Continent, North Atlantic and West Coast regions accounted for 15.4%, 15.1% and 8.9%, respectively, of the total throughput volume.
Throughput Margins
The refining margin per barrel of throughput declined to $12.89 from the year-ago level of $22.58 and lagged our estimate of $18.73.
Refining operating expenses per barrel of throughput was $4.99 compared with $5 in the year-ago quarter. The metric is slightly above our estimate of $4.80.
Depreciation and amortization expenses increased to $2.18 a barrel from $2.02 in the prior-year quarter and are slightly below our estimate of $2.21.
As such, Valero’s adjusted refining operating income was $5.72 per barrel of throughput compared with $15.56 in the prior-year quarter. The metric also missed our estimate of $14.70.
Cost of Sales
Valero’s total cost of sales declined to $33,540 million in the fourth quarter from the year-ago figure of $37,071 million and is also below our estimate of $35,211 million primarily due to lower material costs and operating expenses.
Capital Investment & Balance Sheet
The fourth-quarter capital investment was $540 million. Of the total, $460 million was allotted for sustaining the business.
At the fourth-quarter end, the company had cash and cash equivalents of $5,424 million. As of Dec 31, 2023, it had total debt and finance lease obligations of $11,524 million.
Vaalco Energy (EGY - Free Report) is an independent energy company principally engaged in the acquisition, exploration, development, and production of crude oil and natural gas.
The Zacks Consensus Estimate for EGY’s 2024 EPS is pegged at $1.49. It has witnessed upward earnings estimate revisions for 2024 in the past 60 days. EGY’s earnings for 2024 are expected to surge 325.7% year over year.
Subsea 7 S.A. (SUBCY - Free Report) helps build underwater oil and gas fields. It is a top player in the Oil and Gas Equipment and Services market, which is expected to grow as oil and gas production moves further offshore.
The Zacks Consensus Estimate for SUBCY’s 2024 EPS is pegged at 89 cents. It has witnessed upward earnings estimate revisions for 2024 in the past 30 days. EGY’s earnings for 2024 are expected to soar 242.3% year over year.
Oceaneering International, Inc. (OII - Free Report) is one of the leading suppliers of offshore equipment and technology solutions to the energy industry.
The Zacks Consensus Estimate for OII’s 2024 EPS is pegged at $1.52. It has a Zacks Style Score of A for Growth and B for Value. OII’s earnings for 2024 are expected to surge 76.4% year over year.
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Valero (VLO) Beats Q4 Earnings Estimates, Hikes Dividend
Valero Energy Corporation (VLO - Free Report) has reported fourth-quarter 2023 adjusted earnings of $3.55 per share, beating the Zacks Consensus Estimate of $2.95 per share. However, the bottom line significantly declined from the $8.45 reported in the year-ago quarter.
Total quarterly revenues dipped from $41,746 million in the prior-year quarter to $35,414 million. The top line also missed the Zacks Consensus Estimate of $37,115 million.
Better-than-expected quarterly earnings were primarily driven by a decline in total costs of sales.
Valero Energy Corporation Price, Consensus and EPS Surprise
Valero Energy Corporation price-consensus-eps-surprise-chart | Valero Energy Corporation Quote
Dividend Hike
Valero increased its quarterly cash dividend on common stock by 5% to $1.07 per share. The dividend is payable Mar 4, 2024, to shareholders of record at the close of business on Feb 1, 2024. The dividend hike raises Valero’s annualized cash dividend rate to $4.28 per share.
Segmental Performance
Adjusted operating income in the Refining segment was $1,577 million, declining from $4,355 million in the year-ago quarter and missing our estimate of $4,077 million. Declining refining throughput volumes and a lower refining margin per barrel of throughput affected the segment.
In the Ethanol segment, Valero reported an adjusted operating profit of $205 million, significantly up from $69 million in the year-ago quarter. Higher ethanol production volumes aided the segment.
Operating income in the Renewable Diesel segment declined to $84 million from $261 million in the year-ago quarter. Renewable diesel sales volumes increased to 3,773 thousand gallons per day from 2,443 thousand gallons per day a year ago and surpassed our estimate of 3,288 thousand gallons per day.
Throughput Volumes
In the fourth quarter, Valero’s refining throughput volumes were 2,995 thousand barrels per day (MBbls/d), marginally down from the 3,042 MBbls/d reported in the fourth quarter of 2022. The metric also lagged our estimate of 3,015 MBbls/d.
In terms of feedstock composition, sweet crude, medium/light sour crude and heavy sour crude accounted for 50.7%, 9% and 16.2% of the total volume, respectively. The remaining volume came from residuals, other feedstock, and blendstocks and others.
The Gulf Coast contributed 60.6% to the total throughput volume. Mid-Continent, North Atlantic and West Coast regions accounted for 15.4%, 15.1% and 8.9%, respectively, of the total throughput volume.
Throughput Margins
The refining margin per barrel of throughput declined to $12.89 from the year-ago level of $22.58 and lagged our estimate of $18.73.
Refining operating expenses per barrel of throughput was $4.99 compared with $5 in the year-ago quarter. The metric is slightly above our estimate of $4.80.
Depreciation and amortization expenses increased to $2.18 a barrel from $2.02 in the prior-year quarter and are slightly below our estimate of $2.21.
As such, Valero’s adjusted refining operating income was $5.72 per barrel of throughput compared with $15.56 in the prior-year quarter. The metric also missed our estimate of $14.70.
Cost of Sales
Valero’s total cost of sales declined to $33,540 million in the fourth quarter from the year-ago figure of $37,071 million and is also below our estimate of $35,211 million primarily due to lower material costs and operating expenses.
Capital Investment & Balance Sheet
The fourth-quarter capital investment was $540 million. Of the total, $460 million was allotted for sustaining the business.
At the fourth-quarter end, the company had cash and cash equivalents of $5,424 million. As of Dec 31, 2023, it had total debt and finance lease obligations of $11,524 million.
Zacks Rank & Stocks to Consider
Valero currently carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked companies mentioned below. The three companies presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Vaalco Energy (EGY - Free Report) is an independent energy company principally engaged in the acquisition, exploration, development, and production of crude oil and natural gas.
The Zacks Consensus Estimate for EGY’s 2024 EPS is pegged at $1.49. It has witnessed upward earnings estimate revisions for 2024 in the past 60 days. EGY’s earnings for 2024 are expected to surge 325.7% year over year.
Subsea 7 S.A. (SUBCY - Free Report) helps build underwater oil and gas fields. It is a top player in the Oil and Gas Equipment and Services market, which is expected to grow as oil and gas production moves further offshore.
The Zacks Consensus Estimate for SUBCY’s 2024 EPS is pegged at 89 cents. It has witnessed upward earnings estimate revisions for 2024 in the past 30 days. EGY’s earnings for 2024 are expected to soar 242.3% year over year.
Oceaneering International, Inc. (OII - Free Report) is one of the leading suppliers of offshore equipment and technology solutions to the energy industry.
The Zacks Consensus Estimate for OII’s 2024 EPS is pegged at $1.52. It has a Zacks Style Score of A for Growth and B for Value. OII’s earnings for 2024 are expected to surge 76.4% year over year.