Valero Profit Sinks 20% as Refining Margins Shrink
Valero Energy'sprofit dropped 20.6 percent in the third quarter due to weak refining margins that hurt the industry, the refiner said Tuesday.
CEO Bill Klesse also said the company will explore a sale of its Aruba refinery.
Net income fell to $1.27 billion, or $2.09 per share, from $1.6 billion, or $2.55 per share, a year earlier.
Revenue rose 2 percent to $23.70 billion from $23.24 billion.
Excluding special items, profit from continuing operations was $1.40 per share, compared with $2.35 per share a year ago.
Analysts polled by Thomson Financial expected earnings of $1.36 per share excluding items on revenue of $22.96 billion.
Results included a $1.1 billion reduction in operating income due to higher crude oil prices and resulting lower margins for many of Valero's products.
"The margin environment has been difficult as prices for refined products have failed to keep pace with the increase in feedstock costs," Klesse said in a statement.