Valero Energy Corp Earnings: Swing to a Profit, Topping Analysts’ Estimates

S&P 500 (NYSE:SPY) component Valero Energy Corporation (NYSE:VLO) reversed to a profit in the fourth quarter, beating Wall Street estimates. Valero Energy is an independent refining and marketing company, which owns and operates refineries in the United States and Canada.

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Valero Energy Earnings Cheat Sheet for the Fourth Quarter

Results: Reported a profit of $45 million (8 cents per diluted share) in the quarter. The oil and gas refining and marketing company had a net loss of $438 million or a loss of 77 cents per share in the year earlier quarter.

Revenue: Rose 56.4% to $34.67 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: VLO beat the mean analyst estimate of a loss of 25 cents per share. It beat the average revenue estimate of $32.3 billion.

Quoting Management: “Although the fourth quarter clearly showed the volatility of the refining business, 2011 was a great year for Valero,” said Valero Chairman and CEO Bill Klesse. “We had the highest annual earnings since 2008, acquired the Pembroke and Meraux refineries and related assets, completed several of our major capital projects, and paid off over $775 million in debt. We also increased our cash returned to shareholders by tripling the common stock dividend and conducting stock buybacks in the third and fourth quarters.”

Key Stats:

The company has now beaten estimates the last two quarters. In the third quarter, it topped expectations with net income of $2.11 versus a mean estimate of net income of $1.74 per share.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved down from 85 cents a share to 50 cents over the last sixty days. For the fiscal year, the average estimate has moved down from $4.80 a share to $3.59 over the last sixty days.

Competitors to Watch: Tesoro Corporation (NYSE:TSO), Alon USA Energy, Inc. (NYSE:ALJ), Western Refining, Inc. (NYSE:WNR), Sunoco, Inc. (NYSE:SUN), CVR Energy, Inc. (NYSE:CVI), Frontier Oil Corporation (NYSE:FTO), Chevron Corporation (NYSE:CVX), Holly Corporation (NYSE:HOC), Delek US Holdings, Inc. (NYSE:DK), and Exxon Mobil Corporation (NYSE:XOM).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com