Valero Energy Corporation (VLO Quick QuoteVLO - Free Report) reported third-quarter 2026 adjusted earnings of $23.90 per share, up 553% from $3.66 a year ago. Reported earnings were $23.89 per share compared with $3.53 in the prior-year quarter.

Revenues climbed 43.3% year over year to $46.10 billion from $32.17 billion, while also surpassing the Zacks Consensus Estimate by 23.29%. 

The results benefited from substantially stronger refining margins and improved profitability across the Renewable Diesel and Ethanol segments. Refining throughput averaged 2.97 million barrels per day, down from 3.09 million barrels per day a year earlier.
 

Valero Energy Corporation Price, Consensus and EPS Surprise

Valero Energy Corporation price-consensus-eps-surprise-chart | Valero Energy Corporation Quote

VLO's Refining Profitability Jumps

Refining revenues from external customers increased to $44.37 billion from $30.41 billion a year earlier. The segment generated operating income of $8.78 billion compared with $1.61 billion in the third quarter of 2025. Adjusted operating income reached $8.77 billion, up from $1.67 billion in the year-ago period.

Refining margin surged to $10.73 billion from $3.73 billion a year ago. On a unit basis, refining margin per barrel of throughput increased to $39.24 from $13.14 a year ago. Adjusted refining operating income per barrel climbed to $32.09 from $5.86. Stronger gasoline and distillate product margins supported the improvement.

Valero's Regional Refining Margins Strengthen

The Gulf Coast remained the largest contributor, with refining margin increasing to $6.47 billion from $2.07 billion in the corresponding period of 2025. Throughput averaged 1.87 million barrels per day compared with 1.85 million barrels per day a year earlier.

The Mid-Continent refining margin rose to $1.71 billion from $485 million, while the North Atlantic margin climbed to $2.13 billion from $811 million. The West Coast refining margin increased to $425 million from $362 million, despite throughput declining to 119,000 barrels per day from 259,000 barrels per day. The Mid-Continent region accounted for 15.9% of the throughput volumes, while North Atlantic and West Coast accounted for 17.1% and 4%, respectively.

VLO Sees Renewable Diesel Profitability Improve

Renewable Diesel revenues from external customers declined to $664 million from $719 million in the third quarter of 2025. However, the segment reported operating income of $353 million, reversing the year-ago operating loss of $28 million.

Renewable Diesel margin surged to $510 million from $126 million in the prior-year quarter. Sales volumes averaged 3.42 million gallons per day, up 26% from 2.72 million a year ago. Renewable diesel margin per gallon of sales improved to $1.62 from 50 cents, while operating income per gallon reached $1.12 versus a loss of 11 cents in the prior-year period.

Valero's Ethanol Margins Expand

Ethanol revenues from external customers increased to $1.07 billion from $1.04 billion a year earlier. Segment operating income climbed to $272 million from $183 million, reflecting improved profitability alongside higher production volumes.

Ethanol margin rose 29.3% to $455 million from $352 million in the corresponding period of 2025. Production volumes averaged a quarterly record of 4.80 million gallons per day compared with 4.64 million a year ago. Ethanol margin per gallon of production improved to $1.03 from 83 cents, while operating income per gallon increased to 62 cents from 43 cents in the year-ago period.

VLO's Total Costs Rise

Total cost of sales increased to $36.69 billion from $30.4 billion in the year-ago quarter. Cost of materials and other rose to $32.74 billion from $26.13 billion in the corresponding period of 2025.

Operating expenses, excluding depreciation and amortization, increased slightly to $1.63 billion from $1.61 billion. Depreciation and amortization included in cost of sales declined to $669 million from $824 million. General and administrative expenses increased to $308 million from $246 million.

Valero Generates Strong Operating Cash Flow

Net cash from operating activities totaled $6.93 billion, up from $1.88 billion in the prior-year quarter. Excluding working-capital movements and the portion attributable to the other Diamond Green Diesel joint venture member, adjusted operating cash flow reached $7.25 billion.

Valero's stockholder cash returns represented 52% of adjusted operating cash flow. Capital investments totaled $432 million, including $371 million for sustaining business activities in the third quarter. Capital investments attributable to Valero amounted to $429 million, compared with $382 million a year earlier.

VLO Strengthens Financial Flexibility

Valero ended September with $9.84 billion in cash and cash equivalents. Total debt stood at $8.58 billion, while finance lease obligations totaled $2.42 billion. The debt-to-capitalization ratio, net of cash, was 4% at the end of the third quarter.

The company also completed the St. Charles Refinery FCC Unit optimization project on schedule and within budget. The operational project is expected to enhance production of higher-value products, including alkylate and gasoline.

VLO’s Zacks Rank & Other Key Picks

VLO currently sports a Zacks Rank #1 (Strong Buy). 

Some other top-ranked stocks from the energy sector are PBF Energy (PBF Quick QuotePBF - Free Report) , HF Sinclair Corporation (DINO Quick QuoteDINO - Free Report) and Galp Energia SGPS SA (GLPEY Quick QuoteGLPEY - Free Report) , each carrying a Zacks Rank #1 at present. You can see the complete list of today’s Zacks Rank #1 stocks here.

PBF Energy has a geographically diverse refining network with large-scale processing capacity and a highly complex refining system. It operates six refineries, including Delaware City Refinery, Paulsboro Refinery, Toledo Refinery, Chalmette Refinery, Torrance Refinery and Martinez Refinery, with a combined throughput capacity of 1 million barrels per day and the ability to process a wide range of feedstocks. The diversified refining footprint provides the company exposure to several regional refining markets, supporting higher margins.

HF Sinclair Corporation is a leading downstream energy player operating across five segments: Refining, Renewables, Marketing, Lubricants & Specialties, and Midstream. The company’s primary earnings driver is its robust network of seven complex refineries across the Mid-Continent, Southwest, Rocky Mountains and Pacific Northwest. The outlook for the company’s refining business remains constructive due to tightening supplies of refined products and a supportive crack environment.

Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly with the Mopane discovery in the Orange Basin, offshore Namibia. This discovery allows Galp to diversify its global presence with the potential to become a significant oil producer in the region. It refines and markets oil products and gas, as well as engages in marketing and sales activities.