Valero beats Wall Street estimates

SAN ANTONIO – Higher margins earned on its products helped Valero Energy Corp. beat Wall Street’s estimates for the company’s fourth quarter, although the company’s net income declined by 5 percent.

San Antonio-based Valero, the nation’s largest refiner, said net income from continuing operations attributable to stockholders fell in the quarter ended Dec. 31 to $1.2 billion, or $2.22 per share, from $1.3 billion, or $2.38 per share, for the year-earlier period.

Adjusted for special items, earnings totaled $952 million, or $1.83 a share, beating analysts’ estimates that Valero would earn $1.33 a share for the period ended Dec. 31. Analysts generally ignore one-time items.

“We delivered another quarter of solid operating performance and strong financial results,” Chairman and CEO Joe Gorder said in a statement. “We showed the earnings power from Valero’s advantaged and flexible system during a rapidly changing energy landscape.”

Margins — the difference between the price Valero pays for crude oil and what its gets for its profits — rose to $12.48 a barrel from $11.20 for the year-earlier period.

“I’d say the results were pretty good,” said analyst Sam Margolin, director in equity research at Cowen & Co. “They came in ahead of pretty much everyone’s expectations. Whatever benefits were there to capture, they did it effectively.”

Valero’s stock was up 24 cents a share to $51.75 at midday.

Revenue in the quarter fell to $27.9 billion from $34.4 billion, but beat analysts’ estimates that revenue would total $26.3 billion.

For the year ended Dec. 31, net income from continuing operations attributable to Valero stockholders was $3.7 billion, or $6.97 per share, compared to $2.7 billion, or $4.96 per share, in 2013.

Adjusted net income for 2014 rose to $3.5 billion, or $6.68 a share, compared with $2.4 billion, or $4.41 a share, for 2013.