10-QPeriod: Q1 FY2024

VALERO ENERGY CORP/TX Quarterly Report for Q1 Ended Mar 31, 2024

Filed April 25, 2024For Securities:VLO

Summary

Valero Energy Corporation (VLO) reported a significant decrease in net income attributable to stockholders for the first quarter of 2024, down to $1.245 billion ($3.75 per share) from $3.067 billion ($8.30 per share) in the prior year's comparable period. This decline was primarily driven by a substantial reduction in operating income, largely stemming from lower refining margins, particularly for distillates and gasoline, as well as a decrease in crude oil differentials and throughput volumes. Despite the year-over-year earnings drop, Valero generated $1.846 billion in cash flow from operating activities during the quarter. The company returned $1.4 billion to shareholders through stock repurchases and dividends, while also reducing its outstanding debt. Valero ended the quarter with $4.9 billion in cash and cash equivalents and maintained strong liquidity of $10.0 billion, indicating financial stability despite the challenging operating environment in the refining segment.

Financial Highlights

44 data points
Beta

Revenue

$31.76B

6.2% Gross Margin

Net Income

$1.25B

3.9% Net Margin

EPS (Diluted)

$3.75

Total Assets

$62.57B

Cash & Equivalents

$4.92B

Free Cash Flow

$1.85B

Financial Statements
Beta
Revenue$31.76B
Cost of Revenue$29.78B
Gross Profit$1.98B
Operating Income$1.68B
Interest Expense$140.00M
Net Income$1.25B
EPS (Basic)$3.75
EPS (Diluted)$3.75
Shares Outstanding (Basic)331.00M
Shares Outstanding (Diluted)331.00M

Key Highlights

  • 1Net income attributable to Valero stockholders decreased significantly to $1.245 billion ($3.75/share) from $3.067 billion ($8.30/share) year-over-year.
  • 2Operating income fell by $2.364 billion, largely driven by a $2.317 billion decrease in the Refining segment's adjusted operating income.
  • 3Lower refining margins, particularly for distillates and gasoline, along with reduced crude oil differentials and throughput volumes, were key factors impacting profitability.
  • 4Despite the decline in profitability, the company generated robust operating cash flow of $1.846 billion.
  • 5Valero returned $1.4 billion to stockholders via stock repurchases ($1.023 billion) and dividends ($356 million).
  • 6Total assets decreased slightly to $62.574 billion from $63.056 billion, while total equity increased to $28.824 billion from $28.524 billion.
  • 7The company maintained strong liquidity with $10.0 billion available at the end of the quarter.

Frequently Asked Questions

The significant decrease in net income was primarily due to a substantial decline in operating income, which fell by $2.364 billion. This decline was largely driven by a $2.317 billion decrease in the Refining segment's adjusted operating income, primarily caused by lower gasoline and distillate margins, a decrease in crude oil differentials, and reduced throughput volumes.

Valero generated strong operating cash flow of $1.846 billion in the first quarter of 2024. The company used this cash, along with existing funds, to make capital investments, repay debt, and return $1.4 billion to shareholders through stock repurchases and dividends. Valero ended the quarter with $4.9 billion in cash and cash equivalents and maintained a robust liquidity position of $10.0 billion.

The Renewable Diesel segment's operating income decreased slightly due to lower renewable diesel prices and increased operating expenses. The Ethanol segment's operating income also decreased, although adjusted operating income remained flat year-over-year, primarily due to lower corn prices being offset by lower ethanol and co-product prices, and increased operating expenses.

Valero anticipates gasoline and diesel demand to follow typical seasonal patterns, with jet fuel demand approaching pre-pandemic levels. U.S. and European light product inventories remain low, supporting refinery utilization. However, crude oil differentials may be volatile due to OPEC+ production cuts, pipeline expansions, and geopolitical factors. Renewable diesel and ethanol demand are expected to remain consistent with current levels and follow seasonal patterns, respectively.