European Investor
22 Oct 2026, 15:23
Valero Q3 Profit Surges as Refining Margins, Renewable Diesel and Ethanol Strengthen
Valero Energy (NYSE: VLO) reported a sharp increase in third-quarter 2026 earnings, driven primarily by a major improvement in refining profitability alongside stronger renewable diesel and ethanol results.
Net income attributable to Valero stockholders rose to $6.8 billion, or $23.89 per share, from $1.1 billion, or $3.53 per share, a year earlier. Adjusted EPS was $23.90, compared with $3.66 in the prior-year quarter.
The Refining segment was the main driver, with operating income jumping to $8.8 billion from $1.6 billion a year earlier. Refining throughput averaged 3.0 million barrels per day, with management noting near-record utilization rates during the quarter.
Renewable Diesel also improved significantly, generating operating income of $353 million versus a $28 million loss a year earlier. Ethanol operating income increased to $272 million from $183 million, while production reached a record 4.8 million gallons per day.
Cash generation was strong. Operating cash flow totaled $6.9 billion, while adjusted operating cash flow was $7.3 billion after excluding working-capital effects and the other DGD partner’s share. Valero returned cash to shareholders at a payout ratio equal to 52% of adjusted operating cash flow.
The balance sheet also strengthened, with Valero repaying $526 million of maturing debt during the quarter. The company ended September with $9.8 billion of cash and equivalents versus $8.6 billion of total debt, leaving net debt to capitalization at just 4%.
Valero also completed its St. Charles FCC optimization project on schedule and within budget. The project is designed to increase production of higher-value products such as alkylate and gasoline.
Overall, the quarter showed exceptionally strong refining profitability, improved renewable fuel economics and robust cash generation, with the St. Charles project adding another potential earnings lever going forward.
Valero Energy (NYSE: VLO) reported a sharp increase in third-quarter 2026 earnings, driven primarily by a major improvement in refining profitability alongside stronger renewable diesel and ethanol results.
Net income attributable to Valero stockholders rose to $6.8 billion, or $23.89 per share, from $1.1 billion, or $3.53 per share, a year earlier. Adjusted EPS was $23.90, compared with $3.66 in the prior-year quarter.
The Refining segment was the main driver, with operating income jumping to $8.8 billion from $1.6 billion a year earlier. Refining throughput averaged 3.0 million barrels per day, with management noting near-record utilization rates during the quarter.
Renewable Diesel also improved significantly, generating operating income of $353 million versus a $28 million loss a year earlier. Ethanol operating income increased to $272 million from $183 million, while production reached a record 4.8 million gallons per day.
Cash generation was strong. Operating cash flow totaled $6.9 billion, while adjusted operating cash flow was $7.3 billion after excluding working-capital effects and the other DGD partner’s share. Valero returned cash to shareholders at a payout ratio equal to 52% of adjusted operating cash flow.
The balance sheet also strengthened, with Valero repaying $526 million of maturing debt during the quarter. The company ended September with $9.8 billion of cash and equivalents versus $8.6 billion of total debt, leaving net debt to capitalization at just 4%.
Valero also completed its St. Charles FCC optimization project on schedule and within budget. The project is designed to increase production of higher-value products such as alkylate and gasoline.
Overall, the quarter showed exceptionally strong refining profitability, improved renewable fuel economics and robust cash generation, with the St. Charles project adding another potential earnings lever going forward.
