Valero Energy Corp. reported a smaller-than-expected quarterly loss, adding that it saw “a rapid recovery” in demand for its products as the quarter progressed, Reuters reported.
Global fuel consumption in the second quarter recovered from record lows in March and April as countries started emerging from coronavirus-led lockdowns, but the upturn is under threat due to a resurgence in COVID-19 cases.
Latest U.S. data showed a 25% drop in auto travel from a year ago and a 75% decline in passengers at airports.
“While the impact of the pandemic and the ensuing global economic downturn so far this year has been significant, we saw a rapid recovery in demand for refined products as we moved through the quarter,” Valero’s Chief Executive Joe Gorder said.
Excluding items, Valero lost $1.25 per share in the quarter, much smaller than analysts’ average expectation of a $1.41 per share loss, according to Refinitiv IBES.
Analysts at Tudor Pickering Holt and Co said the beat was partly due to a rise in income from producing ethanol, used to blend into gasoline and in hand sanitizers.
The brokerage said Valero’s core earnings from its ethanol segment broke even, compared to their estimates of a $29 million loss.
Valero’s throughput, the amount of crude oil processed by its refineries, dropped 22% to 2.3 million barrels per day, while refining margins fell 58% to $1.08 billion in the quarter ended June 30.
Shares were last down 1.6% premarket in choppy trading.
The San Antonio, Texas-based company also recorded a gain of $1.8 billion in the quarter related to inventory valuation.
Reporting by Shradha Singh in Bengaluru; Editing by Ramakrishnan M.
