(Reuters) -Valero Energy Corp posted a quarterly profit that blew past Wall Street estimates on Thursday, as a strong rebound in gasoline demand helped offset soaring crude costs.
Margins on refined products have jumped from a pandemic-induced slump in the world’s largest fuel consumer, with gasoline and distillate demand returning to five-year averages.
The first major U.S. refiner to report quarterly earnings, Valero’s third-quarter refining margin was $2.597 billion, compared with $952 million in the previous year.
“We saw significant improvement in refining margins in the third quarter as economic activity and mobility continued to recover in key markets,” Chief Executive Officer Joe Gorder said in a statement.
The improved margins came despite a strong rally in global crude prices between mid-April and end-September. [O/R]
Valero said its refining throughput, or the amount of crude it processed, rose 13.4% to 2.86 million barrels per day (bpd) in the quarter.
The company’s shares rose 1.2% in premarket trading. They have gained about 43% this year.
The company reported net income attributable to its stockholders stood at $463 million, or $1.13 per share, for the three months ended Sept. 30. Valero posted a loss of $464 million, or $1.14 per share, a year earlier.
Excluding items, Valero posted a profit of $1.22 per share, beating analysts’ average estimate of 92 cents per share, according to Refinitiv IBES.
San Antonio, Texas-based Valero also said the Diamond Green Diesel expansion project at its St. Charles, Louisiana refinery (DGD 2), projected to increases renewable diesel production capacity by 400 million gallons per year, was completed in the third quarter and is starting up.
(Reporting by Arunima Kumar in Bengaluru; Editing by Arpan Varghese)