Valero Energy reported adjusted earnings that surpassed analyst expectations for the fourth quarter, propelled by a rebound in refining margins and a small gain in throughput volumes. Shares of the company traded higher in pre-market action, rising 1.6% to $186.97.
The company said its refining margin per barrel of throughput came in at $13.61 for the quarter, up from $8.44 a year earlier. The reported improvement follows a recovery in U.S. refining margins measured by the 3-2-1 crack spread, which rebounded from the multi-year lows observed in 2024 when profits had been reduced after earlier post-pandemic peaks amid supply disruptions tied to Russia's invasion of Ukraine.
Valero's average throughput increased modestly to 3.1 million barrels per day in the quarter, compared with 2.9 million bpd in the same period a year earlier. The company reported adjusted earnings of $3.82 per share for the three months ended December 31, topping the $3.27 per-share expectation compiled by LSEG.
Market participants and analysts have noted that refiners such as Valero could gain from a recovery in Venezuelan crude imports to the U.S. The article cites commentary that the energy sector is preparing to increase output in Venezuela after the Trump administration laid out a long-term plan urging companies to invest $100 billion to revive the country's oil industry. According to BofA analysts referenced by the company, Valero could run an incremental 200,000 barrels per day of Venezuelan output in the near term.
On capital projects, Valero said it is advancing an FCC Unit optimization project at its St. Charles Refinery to boost production of higher-value products. The company expects the St. Charles project to cost $230 million and to be completed in the second half of the year.
The fourth-quarter results positioned Valero as among the early reporters in U.S. refining earnings this season. The company's stated performance reflects both margin expansion versus a year earlier and a slight increase in throughput, while management also flagged a specific refinery upgrade and potential feedstock upside tied to Venezuelan crude.
Investors will likely weigh the margin recovery reported this quarter alongside any follow-through in crude supply developments and project execution timelines. For now, Valero's reported metrics - higher per-barrel refining margins, increased runs, and adjusted EPS that exceeded expectations - underpin the near-term market reaction noted at the open.