Valero Energy Corporation reported earnings this morning, and it’s not pretty. The company had a net loss of $3.3 billion, or EPS of -$6.36. The loss includes an impairment charge against goodwill of $4.1 billion. Excluding the non-cash charge, Valero earned $732 million (EPS of $1.41), considerably higher than EPS estimates of $0.89. Revenue totaled $18.57 billion, slightly below analysts’ estimates of $18.86 billion.
The company’s operating income was up primarily from higher margins ondiesel and jet fuel. Retail margins were also listed as "strong" butmargins on gasoline were lower and refinery throughput was also loweroverall.
Valero expects 2009 to bring a "sluggish economy" that will diminishdemand for refined products. To meet that demand drop, the company willclose its entire Texas City refinery during scheduled maintenance, notjust the portions it plans to work on. The company’s fluid catalyticcracking units, which primarily make gasoline, are running at 70% to75% of capacity. Capital spending will be lower in 2009 than previouslyestimated: $2.7 billion vs. $3.5 billion.
Valero shares opened lower this morning, and are now down more than 5%,to $24.45. No real surprise there. Its 52-week trading range is $13.94to $62.97.
Paul Ausick
January 27, 2009
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
