It has been about a month since the last earnings report for Valero Energy Corporation (VLO - Free Report) . Shares have added about 4.8% in that time frame, underperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fourth-Quarter 2016 Results
Valero Energy posted adjusted fourth-quarter 2016 income of $0.81 per share that surpassed the Zacks Consensus Estimate of $0.74. Improved domestic refined product demand drove the upside.
However, quarterly earnings decreased from the year-ago adjusted earnings of $1.79 per share.
Total revenue for the quarter grew 7.4% year over year to $20,712 million from $18,777 million. The reported figure was also above the Zacks Consensus Estimate of $16,919 million.
During the quarter, refining throughput volumes were approximately 2.85 million barrels per day. The quarterly figure was same as the year-earlier level.
By feedstock composition, sweet crude, medium/light sour crude and heavy sour crude accounted for 41.5%, 19.2% and 13.4%, respectively. The remaining volumes came from residuals, other feedstock as well as blendstocks and others.
The Gulf Coast accounted for approximately 58% of the total throughput volume. The Mid-Continent, North Atlantic and West Coast regions accounted for 16%, 17% and 9%, respectively.
Company-wide throughput margins decreased to $8.22 per barrel from the year-ago level of $10.87 per barrel.
Average throughput margin realized was $8.44 per barrel in the U.S. Gulf Coast as against $10.70 per barrel in the year-earlier period. The metric was $6.85 per barrel in the U.S. Mid-Continent as against $10.34 a year ago. Throughput margin realized was $8.75 per barrel in the North Atlantic compared with $10.09 last year and $8.15 per barrel in the U.S. West Coast compared with $14.62 in the prior-year quarter.
Total operating cost per barrel was $5.50 during the quarter, up 5.2% from the year-earlier figure of $5.23. Refining operating expense per barrel was $3.83 compared with $3.47 in the year-ago quarter. Depreciation and amortization expenses decreased 5.1% year over year to $1.67 per barrel.
Capital Expenditure & Balance Sheet
Fourth-quarter capital expenditure totaled $628.0 million, including $244 million for turnarounds and catalyst expenditures. At the end of the quarter, the company had cash and temporary cash investments of $4.8 billion and debt of $8 billion. Valero Energy also rewarded shareholders with dividends worth $271 million.
Valero Energy’s 2016 capital expenditures totaled $2 billion. For 2017, Valero Energy expects capital expenditures of $2.7 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There have been five downward revisions for the current quarter.
At this time, Valero Energy's stock has a subpar Growth Score of 'D', though it is lagging a bit on the momentum front with an 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable solely for value based on our styles scores.
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.