Valero reports profit of $98 million in first quarter

Higher margins for diesel and jet fuel helped Valero Energy Corp. reverse a loss in the first quarter of 2011 compared to the same period last year, the company said Tuesday.

The San Antonio-based refiner earned a profit of $98 million, or 17 cents a share, compared with a loss in the first quarter of 2010 of $113 million, or 20 cents a share.

However, Valero’s final results were affected by an after-tax loss of $352 million, or 61 cents a share, on derivative contracts. The contracts were closed in the first quarter, the company said.

Also, Valero estimates that it lost $116 million in income after taxes, or 20 cents a share, in March, mostly because of maintenance delays at its refineries.

“Clearly, the first quarter was a much better start to the year than last year,” Valero CEO Bill Klesse said in a statement. “Our refining system experienced strong margins and turned in solid results despite a heavy maintenance schedule and associated restart delays.”

Klesse noted that refining margins for the entire industry were strong in the first quarter because of global demand for fuels and because of “production issues” at foreign refineries.

Looking ahead, Klesse said he expects a strong second quarter for Valero, as its plants are coming back online after maintenance and are operating at higher rates.