01—Abstract
Summary
Summary of the 10-Q filed October 28, 2026. Cited figures are marked; the original filing is the authoritative source.
Valero Energy Corporation's third-quarter 2026 Form 10-Q shows a sharp earnings rebound.
Net income attributable to Valero Energy Corporation stockholders was $6.8 billiona for the third quarter of 2026, compared with $1.1 billion a year earlier, and $11.8 billion for the first nine months of 2026, versus $1.2 billion. The company attributes this to strong refining margins, driven by resilient demand and constrained global supply, along with higher Renewable Diesel and Ethanol results. Operating income for the quarter was $9.1 billion, and Refining segment margin rose $7.0 billion year over year.
Revenues were $46.1 billionb for the quarter and $123.0 billion for the nine months. Cash flow and capital returns were also substantial. Operating cash flow was $13.9 billion for the nine months, and the company returned $7.3 billion to stockholders through share repurchases and dividends.
Cash and cash equivalents rose to $9.8 billionc on the balance sheet, and total liquidity was $14.7 billion. In October 2026, the Board authorized a new buyback of up to $10.0 billion, in addition to the $3.0 billion remaining under the July 2026 program, and declared a quarterly dividend of $1.20 per share. The filing also flags several risks.
The Port Arthur Refinery suffered a fire in March 2026 that forced a full shutdown, with insurance expected to cover a substantial portion of repair costs. The company faces lawsuits, including a proposed class action, and has received proposed regulatory citations and penalties that it intends to contest.
The Benicia Refinery ceased refining operations by April 2026, and its decommissioning costs are now reported within corporate expenses. Working capital also shifted materially, with receivables and accounts payable both rising sharply over the nine months.
02—Key points
Key Highlights
- Net income attributable to Valero stockholders was $6.8 billion in Q3 2026 versus $1.1 billion in Q3 2025; nine-month net income was $11.8 billion versus $1.2 billion.
- Refining segment margin rose to $10.7 billion in Q3 2026 from $3.7 billion, driven mainly by higher distillate and gasoline margins.
- Operating cash flow was $13.9 billion for the first nine months of 2026, compared with $3.8 billion a year earlier.
- Share repurchases totaled $6.2 billion for the nine months; the Board authorized an additional $10.0 billion buyback on October 27, 2026, and declared a $1.20 quarterly dividend.
- A March 2026 fire at the Port Arthur Refinery led to a full shutdown; insurance is expected to cover a substantial portion of repair costs, subject to a self-insured retention.
- Lawsuits, including a proposed class action, relate to the Port Arthur incident, and proposed regulatory citations and penalties were received in Q3 2026, which the company intends to contest.
- Total liquidity was $14.7 billion at September 30, 2026, and long-term debt was $10.0 billion, after issuing $850 million of 5.150 percent Senior Notes due 2036.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, Valero Energy kept $0.15.
- Revenue$46.10B100.0%
- Cost of revenue−$36.69B79.6%
- Gross profit$9.41B20.4%
- Operating costs−$334.0M0.7%
- Operating income$9.07B19.7%
- Interest, other & tax−$2.25B4.9%
- Net income$6.83B14.8%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed October 28, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $46.10B$32.17B | +43.3% |
| Cost of Revenue | $36.69B$30.40B | +20.7% |
| Gross Profit | $9.41B$1.77B | +430.9% |
| Operating Income | $9.07B$1.51B | +501.3% |
| Interest Expense | $144.00M$139.00M | +3.6% |
| Net Income | $6.83B$1.09B | +523.6% |
| EPS (Basic) | $23.90$3.54 | +575.1% |
| EPS (Diluted) | $23.89$3.53 | +576.8% |
| Shares Outstanding (Basic) | 285.00M309.00M | −7.8% |
| Shares Outstanding (Diluted) | 285.00M309.00M | −7.8% |
05—Questions
Frequently Asked Questions
What drove the large increase in Valero's earnings this quarter?
The filing attributes the increase mainly to strong refining margins, supported by resilient demand for transportation fuels and constrained global refining supply. Refining segment margin rose $7.0 billion year over year in Q3 2026, and Renewable Diesel and Ethanol segment results also improved.
How is Valero returning cash to shareholders?
In the first nine months of 2026, Valero purchased $6.2 billion of common stock for treasury and paid $1.1 billion in dividends. On October 27, 2026, the Board authorized a new buyback of up to $10.0 billion, in addition to the $3.0 billion remaining under the July 2026 program, and declared a quarterly dividend of $1.20 per share.
What is the status of the Port Arthur Refinery and related costs?
The refinery shut down after a March 23, 2026 fire, resumed operations in April at reduced rates, and returned to normal throughput during the second quarter. Insurance is expected to cover a substantial portion of repair costs and capital expenditures in 2026, subject to the self-insured retention, though insurance proceeds may be received in different periods from when costs are incurred. No insurance proceeds had been received as of September 30, 2026.
What is happening with the Benicia Refinery?
Valero idled all processing units at the Benicia Refinery by April 2026 and ceased refining operations. The company is evaluating redevelopment options for the site, plans to maintain required permits, and expects to meet Northern California customer obligations through imports or other supply arrangements. Its decommissioning and redevelopment activities are now reported within other corporate expenses.
Are there any new debt or liquidity developments?
In March 2026, Valero issued $850 million of 5.150 percent Senior Notes due 2036 and used part of the proceeds to repay maturing debt. Total liquidity was $14.7 billion at September 30, 2026, including $5.3 billion of committed facility availability and $9.4 billion of cash, excluding VIE cash. The company believes it has sufficient funds for the next 12 months and beyond.
06—Continue