Valero reported Tuesday that first-quarter profits rose more than 18 percent, easily beating beat Wall Street expectations as higher refining margins offset weak gasoline demand.
The nation's largest independent oil refiner said net income for the January-March period amounted to $309 million, or 59 cents a share, up from the $261 million, or 48 cents per share, it earned a year ago.
Thomson Reuters says analysts it surveyed expected earnings of 50 cents per share.
Revenue fell 51 percent to $13.82 billion from a year ago, however, with the recession eating into demand for energy.
Last year at this time, crude prices were well into a historic run toward $150 per barrel, which led to slimmer margins by July for refiners like Valero. This year, with crude prices near five-year lows, Valero says margins improved on gasoline, as well as fuel oil, asphalt and petroleum coke. Also, as energy costs remained low in the first quarter, refining operating expenses declined.
This year, Valero entered the biofuel business, snapping up six plants from bankrupt ethanol producer Verasun Energy. The company closed on the sale of those plants earlier this month and Bill Klesse, Valero's chief executive, said the company will close on another soon.