San Antonio's Valero Posts a Record $6.8 Billion Quarter as Refining Margins Surge

Valero Energy, the San Antonio-based refiner, reported third-quarter net income attributable to stockholders of $6.8 billion, up from $1.1 billion a year earlier, in results released Thursday, Oct. 22. Reported earnings were $23.89 a share, compared with $3.53 a year earlier, and adjusted profit reached $23.90 a share, above the $21.07 analyst estimate compiled by LSEG, Reuters reported. Reuters described the profit as a quarterly record and linked the margin surge to disruptions caused by the Middle East conflict.

The engine was the refining segment, where operating income rose to $8.8 billion from $1.6 billion a year earlier, on throughput averaging 3.0 million barrels a day across the company's system. Published breakdowns of the quarter put Valero's refining margin at $39.24 a barrel of throughput, against $13.14 a year ago. Valero also completed its St. Charles refinery fluid catalytic cracking unit optimization project during the quarter, on schedule and within budget; the $230 million project is operating and is intended to increase production of higher-value products, including alkylate and gasoline.

"Our refineries operated at near-record utilization rates, providing a reliable supply of critical transportation fuels during the quarter," Chairman and CEO Lane Riggs said, as published in the company's earnings materials.

The quarter left the San Antonio company with a stronger balance sheet as well: by Sept. 30, debt stood at $8.6 billion and cash and cash equivalents at $9.8 billion, and during the quarter Valero repaid $100 million of debentures maturing in July and $426 million of senior notes maturing in September. The third quarter followed a second quarter that had itself produced $3.7 billion in net income — making Saturday's hometown headline a simple one: the largest company headquartered in San Antonio just had the biggest quarter in its history.