Valero Energy 2Q profit drops, revenue tops Street

Valero Energy 2Q profit falls as some oil prices rise, revenue beats analysts' expectations

Associated Press

SAN ANTONIO (AP) -- Valero Energy's second-quarter net income slid 44 percent as the company dealt with higher prices for oil and natural gas as well as escalating costs for some government-required ethanol credits.

The refinery operator's earnings fell short of analysts' estimates, but revenue beat Wall Street's expectations.

Valero earned $466 million, or 85 cents per share, compared with $831 million, or $1.50 per share, a year ago.

Analysts polled by FactSet forecast earnings of 97 cents per share.

The current quarter included charges to general and administrative expenses of $20 million, or 4 cents per share. General and administrative expenses also included $34 million in charges tied to various environmental and legal matters. There was also a charge of 1 cent per share related to the May spinoff of CST Brands to Valero stockholders.

Valero's refining throughput margins dropped as it faced significantly lower discounts for heavy sour and light crude oil, rising natural gas costs and highest costs for ethanol credits needed to comply with the U.S. federal Renewable Fuel Standard.

Operating revenue for the San Antonio company slipped 2 percent to $34.03 billion, but topped Wall Street's $30.38 billion estimate.

Valero Energy Corp. said that it is considering a master limited partnership for its logistics assets. Oil refiner and chemicals company Phillips 66 created a limited partnership, Phillips 66 Partners, that went public on Tuesday.

Valero Enregy's shares rose 1 cent to $35.28 in afternoon trading.

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