Valero Energy Corporation (VLO) posted adjusted fourth-quarter 2014 income of $1.83 per share, surpassing the Zacks Consensus Estimate of $1.21 by 51.2%.
The quarterly earnings also compare favorably with the year-ago adjusted earnings of $1.78 per share. The growth was mainly backed by higher refining throughput margins and lower refining operating expenses.
Total revenue for the quarter decreased 19.1% year over year to $27,859.0 million from $34,429.0 million in the prior-year quarter. However, it was ahead of the Zacks Consensus Estimate of $25,137.0 million.
Full-year 2014 adjusted earnings came in at $6.68 per share, surpassing our expectation of $5.95 and increasing 51.5% from the year-ago level of $4.41. Full-year revenues decreased 5.2% year over year to $130,844 million but outpaced the Zacks Consensus Estimate of $127,838 million.
Throughput Volumes
During the quarter, refining throughput volumes were approximately 2.82 million barrels per day, up from the year-earlier level of 2.78 million barrels per day.
By feedstock composition, sweet crude, medium/light sour crude and heavy sour crude accounted for 43.9%, 14.9% and 15.9%, 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 17%, 15% and 9%, respectively.
Throughput Margins
Throughput margins increased to $12.48 per barrel from the year-ago level of $11.20 per barrel.
Average throughput margin realized was $11.88 per barrel in the U.S. Gulf Coast (down from $12.25 per barrel in the year-earlier period), $14.10 per barrel in the U.S. Mid-Continent (up from $12.94), $14.49 per barrel in the North Atlantic (up from $8.04) and $9.98 per barrel in the U.S. West Coast (up from $7.79).
Total operating cost per barrel was $5.31 during the quarter, 1.7% lower than the year-earlier figure of $5.40. Refining operating expense per barrel was $3.76 compared with $3.79 in the year-ago quarter. Depreciation and amortization expenses decreased 3.7% year over year to $1.55 per barrel.
Capital Expenditure & Balance Sheet
Fourth-quarter capital expenditure totalled $857.0 million, including $157 million for turnarounds and catalyst expenditures. At the end of the quarter, the company had cash and temporary cash investments of $3.7 billion. Valero also rewarded shareholders through dividends worth $143 million.
Valero’s 2014 capital expenditures came in at $2.8 billion, down by $100 million. For 2015, Valero expects capital expenditures of $2.65 billion.
Zacks Rank
Valero currently carries a Zacks Rank #3 (Hold). Better-ranked stocks include Cheniere Energy Partners LP (CQP), Transocean Partners LLC (RIGP) and Phillips 66 Partners LP (PSXP). Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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