Valero Warns as High Oil Prices Hit Margins
Oil refiner Valero Energy expects sharply lower quarterly profit due to a drop in refining, throughput and product margins, the company said on Wednesday.
It forecast earnings of $1.25 to $1.35 per share from continuing operations, including one-time items. Excluding special items, it expects $1.30 to $1.40 a share.
The forecast comes on the heels of Chevron's warning on Tuesday that it expects third-quarter net income to be down significantly from the second quarter due to a sharp drop in refining margins.
Valero said it expects to report lower throughput margins, mainly due to higher feedstock costs compared with a year earlier.
It also said it sold many of its products, such as asphalt, lube oil and petrochemical feedstock, at much lower margins as prices for those items did keep pace with the price of crude oil.
Analysts had expected the company to earn $2.01 per share in the third quarter, according to Reuters Estimates.
Shares of Valero were lower by 2.2% on the New York Stock Exchange.