By Rye Druzin, San Antonio Express-News
Valero Energy Corp.’s third quarter earnings slid 56 percent, but still beat analysts’ projections as oil prices started to stabilize.
Valero Chief Executive Officer Joe Gorder called the third-quarter a “challenging earnings environment.”
“Our team’s focus on safe, reliable, low-cost operations allowed us to deliver solid performance while executing major turnarounds at our Port Arthur and Ardmore refineries,” Gorder said in a statement.
The San Antonio-based refiner earned $613 million, or $1.33 a share, for the three months ended Sept. 30, compared with $1.4 billion, or $1.79 a share, in the third-quarter of 2015. Analysts projected a 68 percent decline in profits to $436 million, or $0.93 cents a share, according to average estimates compiled by Bloomberg.
U.S. crude prices have collapsed over the last two years from a high of $107 a barrel in June 2014. They’ve seesawed in recent months, almost doubling over the last few months from a low of $26 a barrel in February, averaging $46.91 throughout the third quarter.
Refineries have been something of a safe haven for investors throughout the oil rout, benefiting from the lower costs to purchase crude, which is refined into gasoline and other fuels.
Valero’s operating revenues fell to $19.6 billion, a 13 percent drop from the same period last year amid lower gasoline prices.
Despite the falling revenue, dividends have continued to rise, with dividends per common share up 60 cents to $1.80 through the first three quarters of 2016.
Valero said its refineries were operating at 95 percent capacity in the third-quarter, producing an average of 2.9 million barrels per day.
Biofuel blending costs rose to $198 million, more than double what they were in last year’s third-quarter. The company expects those costs to total between $750 million and $850 million for 2016.