Major U.S. refiner Valero Energy (NYSE: VLO) reported on Tuesday third-quarter earnings above analyst expectations, thanks to strong product demand exceeding 2019 levels and solid refining fundamentals in the U.S. and worldwide.
Valero, which launched the earnings season for U.S. refiners today, said its adjusted net income surged to $2.8 billion, or $7.14 per share, for the third quarter, up from $545 million, or $1.33 per share, for the third quarter of 2021.
The adjusted per-share earnings surpassed the analyst consensus of $6.80 compiled by The Wall Street Journal.
Revenues surged to $44.454 billion from $29.52 billion for the third quarter of last year, also beating the analyst consensus estimate.
The Refining segment’s operating income soared to $3.8 billion for the third quarter of 2022, compared to $835 million for the third quarter of 2021.
Valero’s refining throughput volumes averaged 3.0 million barrels per day (bpd) in the third quarter of 2022, up by 141,000 bpd higher than in the same period last year. Valero said that the company’s refinery utilization rate was 95% in the third quarter of 2022, compared to 91% in the third quarter of 2021.
Most U.S. refiners have operated near capacity this year to meet demand domestically and to meet stronger export demand after the Russian invasion of Ukraine and the looming EU embargo on imports of Russian oil and products.
“Refining fundamentals remain strong as product demand through our system has surpassed 2019 levels, while global product supply remains constrained due to capacity reductions and high natural gas prices in Europe are setting a higher floor on margins,” Valero’s chairman and CEO Joe Gorder said.
“We continue to maximize refining utilization in a safe, reliable and environmentally responsible manner to provide essential products.”
U.S. refiners have been under constant criticism by the White House this year for “not passing the record profits onto consumers.”
“Keeping prices high even as input costs fall is unacceptable, and the President will call on companies to pass their savings through to consumers – now,” the White House said last week.