Valero Energy Reports Significant Decline in Revenue and Profitability in Q3 and Nine-Month Results

Valero Energy Corporation reported significant financial changes in its third quarter and nine-month results for 2024, reflecting a notable decline in revenue and profitability compared to the previous fiscal period. For the three months ended September 30, 2024, Valero's total revenues were $32,876 million, down from $38,404 million in the same period of 2023. The decrease was primarily attributed to lower product prices for petroleum-based transportation fuels, with the refining segment contributing $31,332 million, a decrease from $36,521 million year-over-year.

Operating income for the third quarter of 2024 was $507 million, a sharp decline from $3,503 million in the prior year. This decline was driven by reduced gasoline and distillate margins, a decrease in crude oil differentials, and lower product prices in the Renewable Diesel segment. Net income for the quarter fell to $393 million, compared to $2,663 million in Q3 2023, while earnings per share dropped to $1.14 from $7.49.

For the nine months ended September 30, 2024, total revenues were $99,125 million, down from $109,352 million in the same period of 2023. Net income for this period was $2,649 million, significantly lower than $7,931 million in 2023. The refining segment's operating income for the nine months was $3,534 million, down from $9,934 million, reflecting a decrease in refining margins primarily due to lower distillate and gasoline margins.

Valero's total current assets decreased to $23,976 million as of September 30, 2024, from $26,221 million at the end of 2023. Total assets also declined to $60,382 million from $63,056 million. Stockholders’ equity decreased to $25,253 million from $26,346 million, while retained earnings rose to $47,074 million from $45,630 million.

Strategically, Valero is adapting to regulatory changes in California, including Senate Bill No. 1322 and Senate Bill No. 2, which impose new reporting obligations and maximum gross gasoline refining margins. The company is reviewing the implications of these regulations on its operations, which could adversely affect financial performance and asset recoverability.

In terms of capital management, Valero returned $3.7 billion to stockholders through common stock purchases and dividends during the first nine months of 2024, while also repaying $167 million of its Senior Notes. The company plans to continue investing in its operations, with expected capital investments of approximately $2.0 billion for 2024, focusing on sustaining the business and expanding low-carbon initiatives.