Valero’s profit dives in first quarter

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Valero earned $305 million, or 68 cents per share, down from $495 million, or $1.05 per share, during the first three months of last year. Revenues we

By Rye Druzin
San Antonio Express-News

San Antonio-based Valero Energy Corp. first quarter profit plunged 38 percent as the company invested in turnaround projects, the company said Tuesday.

The nation’s largest refiner earned $305 million, or 68 cents per share, down from $495 million, or $1.05 per share, during the first three months of last year. The drop was expected. Valero beat estimates by analysts, which projected earnings of 61 cents per share.

“Our refining team safely executed turnarounds at the Benicia, Texas City, St. Charles, and Meraux refineries,” Joe Gorder, Valero’s CEO, said in a press release announcing the results. “With the bulk of this year’s planned maintenance behind us, our refineries should be well positioned to capture available margin opportunities.”

The company said it spent $641 million on capital investments during the quarter, including $245 million on turnaround projects. The company is on track to invest $2.7 billion this year, consisting of $1.1 billion for “growth projects” and $1.6 billion on current operations. That includes the Diamond Pipeline, the Diamond Green Diesel capacity expansion, the Houston alkylation unit, and the Wilmington cogeneration plant, Valero said.

Valero has been fighting against requirements set by the Environmental Protection Agency’s Renewable Fuel Standards that requires refiners to bear the costs of blending ethanol into their gasoline.

Valero and other industry groups want the burden — which cost Valero nearly $750 million in 2016 — to shift away from refiners and toward gas station owners.

Biofuel blending costs were $146 million in the first quarter of 2017, which was $15 million lower than the first quarter of 2016.