Valero Energy (VLO) Expects Its Refining Margins and Product Demand to Improve

Valero Energy Corp. (NYSE:VLO), founded in 1980, has enjoyed tremendous success since its inception. It started from a single factory and gradually expanded to several facilities over the years. Its aggressive growth helped the company to become one of the leading petroleum refiners and renewable fuels producers. However, the company’s market value has declined over the past couple of years amid low crude prices.

The San Antonio, Texas-based company on Thursday announced its financial results for the fourth quarter. It reported a loss of $359 million, or $0.88 per share for the three months ended December 31, as compared to earnings of $2.58 per share in the comparable period of 2019. On an adjusted basis, the company lost $1.06 per share, narrower than a loss of $1.42 per share forecasted by analysts.

Revenue for the quarter came in at $16.60 billion, as compared to $27.8 billion in the year-ago quarter. Analysts on average were looking for revenue of $16.21 billion.

CEO Joe Gorder said in a statement, “We expect to see continued improvement in product demand with widespread vaccine distribution around the world. We also expect a faster recovery in refining margins with the continued shutdowns and conversions of uncompetitive refineries.”

Valero reported an adjusted loss of $1.3 billion, or $3.12 per share for the full year, as compared to a profit of $5.70 per share in 2019. The company announced a quarterly cash dividend of $0.98 per share, payable to shareholders on March 4.

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Valero (VLO) shares fell nearly 3 percent in the mid-day trading Friday following the fourth-quarter results. The stock has lost more than 34 percent of its value during the past 12 months.

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