Valero Energy Corporation
VLO · NYSE
Next quarter
Expected to report Jan 28, 2027 — estimated from last year’s reporting date.
Consensus is $19.10 EPS for Dec 2026 across 6 estimates, ranging $13.92 to $22.44.
VLO Sep 2026
- 12.31%
- $21.28
- $23.90
- —
- $46.10B
Reported results
- $46.10B
- 20.41%
- $9.07B
- 19.68%
- $6.83B
- $23.89
Highlights
- Earnings and expectations: Third-quarter diluted EPS was $23.89, or $23.90 adjusted, versus consensus of $21.28, a 12.31% beat; adjusted EPS was $3.66 a year earlier and $12.62 in Q2 FY2026.
- Refining surge: Refining operating income reached $8.8 billion versus $1.6 billion a year earlier, as refining margin rose to $10.7 billion from $3.7 billion; throughput averaged 2.972 million barrels per day.
- Consolidated results: Revenue was $46.1 billion, operating income $9.1 billion and net income attributable to Valero stockholders $6.8 billion, compared with $32.2 billion, $1.5 billion and $1.1 billion, respectively, in Q3 FY2025.
- Renewable diesel recovery: The segment earned $353 million versus a $28 million loss a year earlier; margin increased to $510 million, with sales volumes averaging 3.423 million gallons per day.
- Ethanol improvement: Operating income rose to $272 million from $183 million, and production averaged a quarterly-record 4.799 million gallons per day.
- Cash generation and returns: Adjusted operating cash flow was $7.3 billion after a $526 million working-capital headwind and a $205 million adjustment for DGD’s other member; stockholder cash returns equaled 52% of adjusted cash flow.
- Liquidity and project completion: Valero ended September with $9.8 billion of cash and $8.6 billion of debt, a 4% net debt-to-capitalization ratio, and completed the St. Charles FCC optimization project on schedule and within budget.
Analysis
Valero delivered a sharp year-over-year earnings increase and exceeded expectations: diluted EPS of $23.89 was 12.31% above the $21.28 consensus, while adjusted EPS was $23.90. Revenue of $46.1 billion increased from $32.2 billion in Q3 FY2025 and $44.5 billion in Q2 FY2026. Net income attributable to stockholders reached $6.8 billion, versus $1.1 billion a year ago and $3.7 billion in the prior quarter. The result also reflects a sequential step-up from an already strong Q2, with EPS rising from $12.62.
The defining driver was refining: operating income climbed to $8.8 billion from $1.6 billion a year ago, as refining margin nearly tripled to $10.7 billion. This occurred despite throughput easing to 2.972 million barrels per day from 3.087 million. Renewable diesel also swung to profit, and ethanol improved, but both were much smaller contributors. Cash generation remained strong at $7.3 billion on Valero’s adjusted measure; the company returned cash equal to 52% of that amount, repaid $526 million of maturing notes and finished the quarter with $9.8 billion of cash. The St. Charles FCC optimization project was completed on schedule and within budget.
Refining margins
The refining cycle dominated the quarter. Segment operating income rose to $8.782 billion from $1.610 billion in Q3 FY2025, while adjusted operating income was $8.774 billion. Refining margin increased to $10.730 billion from $3.731 billion, or $39.24 per barrel of throughput versus $13.14. The market backdrop was markedly stronger: Gulf Coast ultra-low-sulfur diesel less Brent averaged $72.27 per barrel versus $21.05 a year earlier, and Gulf Coast CBOB gasoline less Brent averaged $24.08 versus $7.78.
- Throughput: Refining volumes averaged 2.972 million barrels per day, down from 3.087 million a year earlier; management described refinery utilization as near-record.
- Regional contribution: U.S. Gulf Coast refining margin was $6.472 billion, U.S. Mid-Continent $1.706 billion, North Atlantic $2.127 billion and U.S. West Coast $425 million.
Renewable diesel and ethanol
- Renewable diesel: Operating income was $353 million, reversing a $28 million loss in Q3 FY2025. Margin rose to $510 million from $126 million, or $1.62 per gallon versus $0.50; sales volumes averaged 3.423 million gallons per day, up from 2.717 million.
- Ethanol: Operating income increased to $272 million from $183 million, while margin rose to $455 million from $352 million. Production set a quarterly record at 4.799 million gallons per day, compared with 4.635 million a year earlier.
Cash returns and liquidity
- Cash flow: GAAP operating cash flow was $6.932 billion. Valero’s adjusted measure was $7.253 billion after excluding a $526 million unfavorable working-capital impact and $205 million attributable to DGD’s other joint-venture member.
- Investment and distributions: Capital investments totaled $432 million, including $371 million for sustaining the business; capital investments attributable to Valero were $429 million. Stockholder cash returns represented 52% of adjusted operating cash flow, and the quarterly dividend was $1.20 per share.
- Balance sheet: Cash and cash equivalents were $9.840 billion and total debt was $8.579 billion at September 30; net debt to capitalization was 4%. Valero repaid $100 million of debentures and $426 million of senior notes that matured during the quarter.
St. Charles upgrade
Valero completed the FCC Unit optimization project at its St. Charles refinery during the quarter, on schedule and within budget. The project is operational and is expected to increase capacity for higher-value products, including alkylate and gasoline. Management highlighted the project as part of the refinery’s ability to supply transportation fuels.
