Valero Energy Corporation (VLO) Bundle
A Brief History of Valero Energy Corporation
Valero Energy Corporation, founded in 1980 in San Antonio, Texas, has grown to become a leading independent refiner and marketer of transportation fuels and petrochemical products. Over the years, Valero has expanded its operations significantly through strategic acquisitions and investments, establishing a substantial presence in the global energy market.
Recent Financial Performance (2024)
As of September 30, 2024, Valero reported revenues of $99.125 billion, a decrease of $10.227 billion compared to $109.352 billion in the same period of 2023. The operating income for the first nine months of 2024 was $3.407 billion, down from $10.305 billion in 2023. Adjusted operating income also decreased to $3.447 billion from $10.323 billion, reflecting a significant decline in profitability attributed to lower product prices.
Segment Performance
Valero operates through three primary segments: Refining, Renewable Diesel, and Ethanol. For the first nine months of 2024, the financial performance by segment was as follows:
| Segment | Operating Income (2024) | Operating Income (2023) | Change |
|---|---|---|---|
| Refining | $3.534 billion | $9.934 billion | $(6.400 billion) |
| Renewable Diesel | $337 million | $768 million | $(431 million) |
| Ethanol | $268 million | $363 million | $(95 million) |
| Total | $3.407 billion | $10.305 billion | $(6.898 billion) |
Refining Segment Analysis
The refining segment faced significant challenges in 2024, with operating income declining by $6.4 billion due to reduced margins primarily influenced by lower gasoline and distillate prices. The refining margin decreased to $8.999 billion from $15.534 billion in 2023. Operating expenses also saw a reduction to $3.659 billion, down from $3.832 billion.
Renewable Diesel and Ethanol Segments
In the Renewable Diesel segment, operating income decreased by $431 million year-over-year, attributed to a significant decline in product prices. The operating income for this segment was $337 million in 2024 compared to $768 million in 2023. The Renewable Diesel margin fell to $795 million from $1.214 billion.
For the Ethanol segment, operating income was $268 million, down from $363 million in the previous year, with the ethanol margin decreasing to $747 million from $806 million.
Market Conditions and Outlook
Valero's performance in 2024 has been impacted by fluctuating crude oil prices and market dynamics affecting fuel demand. The Brent crude oil price averaged $81.72 per barrel in 2024, leading to variability in refining margins. The company anticipates ongoing challenges but is positioned to adapt to market changes through its diversified operations and strategic focus on low-carbon technologies.
Conclusion
Valero Energy Corporation continues to navigate a complex energy landscape as it strives to maintain profitability amid fluctuating market conditions. The company's commitment to operational efficiency and strategic investments in renewable energy will be critical in its ongoing efforts to enhance shareholder value.
A Who Owns Valero Energy Corporation (VLO)
Major Shareholders
As of 2024, Valero Energy Corporation (VLO) has a diverse range of shareholders, including institutional investors, mutual funds, and individual stakeholders. The largest shareholders include:
| Shareholder Type | Shareholder Name | Shares Owned (millions) | Percentage Ownership |
|---|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 30.1 | 9.4% |
| Institutional Investor | BlackRock, Inc. | 28.5 | 8.9% |
| Mutual Fund | State Street Corporation | 25.0 | 7.8% |
| Individual Holder | Valero's Executive Officers | 2.5 | 0.8% |
| Other | Various Institutional and Retail Investors | 267.9 | 83.1% |
Insider Ownership
Insider ownership, which includes shares held by executives and directors, is a crucial indicator of management's confidence in the company. As of September 30, 2024, insider ownership is as follows:
| Insider Name | Position | Shares Owned |
|---|---|---|
| Joseph W. Gorder | Chairman and CEO | 1.2 million |
| Gary H. Simmons | Executive Vice President | 0.8 million |
| Other Executives | Various | 0.5 million |
The total insider ownership accounts for approximately 0.8% of the total shares outstanding, indicating a significant alignment of interests between management and shareholders.
Stock Performance and Market Trends
As of late September 2024, Valero's stock price has experienced fluctuations due to market conditions:
| Date | Stock Price (USD) | Market Capitalization (billion USD) | Volume (millions) |
|---|---|---|---|
| September 30, 2024 | 160.05 | 51.0 | 3.8 |
| August 30, 2024 | 149.87 | 48.8 | 2.1 |
| July 30, 2024 | 136.15 | 43.5 | 1.5 |
Valero's market capitalization reached approximately $51 billion by the end of September 2024, reflecting investor confidence despite the fluctuating oil market.
Dividend Policy
Valero Energy Corporation maintains a robust dividend policy, with the following details for 2024:
| Quarter | Dividend per Share (USD) | Total Dividend Payout (million USD) |
|---|---|---|
| Q1 2024 | 1.07 | 342 |
| Q2 2024 | 1.07 | 342 |
| Q3 2024 | 1.07 | 342 |
The total annual dividend payout for 2024 is projected to be approximately $1.5 billion, reinforcing Valero's commitment to returning value to its shareholders.
Recent Financial Performance
In the third quarter of 2024, Valero reported the following financial results:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income (million USD) | 364 | 2,622 |
| Operating Income (million USD) | 507 | 3,503 |
| Earnings per Share (USD) | 1.14 | 7.49 |
The significant decrease in net income compared to the previous year is attributed to lower product margins and increased operational costs.
Liquidity Position
As of September 30, 2024, Valero's liquidity position is as follows:
| Metric | Amount (million USD) |
|---|---|
| Cash and Cash Equivalents | 5,400 |
| Total Liquidity | 10,300 |
This liquidity provides Valero with the flexibility to navigate market challenges and capitalize on growth opportunities.
Valero Energy Corporation (VLO) Mission Statement
Mission Statement Overview
Valero Energy Corporation's mission is to be the world's leading manufacturer and marketer of transportation fuels and petrochemical products. Valero aims to provide reliable energy solutions while ensuring environmental responsibility and operational excellence.
Financial Performance Metrics
As of the first nine months of 2024, Valero reported the following financial metrics:
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Net Income (millions) | $2,649 | $7,931 | ($5,282) |
| Revenues (millions) | $99,125 | $109,352 | ($10,227) |
| Operating Income (millions) | $3,407 | $10,305 | ($6,898) |
| Cash from Operations (millions) | $5,613 | $7,990 | ($2,377) |
| Capital Investments (millions) | $1,437 | $1,382 | $55 |
| Cash and Cash Equivalents (millions) | $4,966 | $5,036 | ($70) |
| Total Debt (millions) | $27,938 | $24,381 | $3,557 |
Strategic Initiatives
Valero is committed to sustainability and has set greenhouse gas (GHG) emissions reduction targets. In 2024, Valero's capital investments included funding for low-carbon projects, which are a significant part of their operational strategy.
Segment Performance
For the first nine months of 2024, Valero's operating income by segment was as follows:
| Segment | Operating Income (millions) | 2024 | 2023 | Change |
|---|---|---|---|---|
| Refining | $3,534 | $9,934 | ($6,400) | |
| Renewable Diesel | $337 | $768 | ($431) | |
| Ethanol | $268 | $363 | ($95) |
Market Influence and Trends
Valero's financial performance has been influenced by fluctuations in crude oil prices and product margins. For the nine months ended September 30, 2024, the average price of Brent crude oil was $81.72 per barrel, a slight decrease from $82.12 per barrel in 2023. This fluctuation has impacted the refining margins significantly.
Stockholder Returns
In 2024, Valero returned $3.7 billion to stockholders through stock repurchases and dividends, reflecting a commitment to shareholder value despite the challenges faced in the market.
Conclusion on Mission Alignment
Valero's mission to deliver energy solutions aligns with its operational strategies and financial performance, focusing on growth in sustainable energy while managing economic challenges.
How Valero Energy Corporation (VLO) Works
Overview of Operations
Valero Energy Corporation operates as an international manufacturer and marketer of transportation fuels and petrochemical products. As of 2024, Valero operates 15 refineries throughout the United States, Canada, and the U.K., with a combined throughput capacity of approximately 3.2 million barrels per day. The company also has a strong presence in renewable diesel production and ethanol production.
Financial Performance
For the first nine months of 2024, Valero reported total revenues of $99.1 billion, a decrease from $109.4 billion in the same period of 2023. The operating income for the same period was $3.4 billion, down from $10.3 billion year-over-year.
| Financial Metrics | 2024 (9 Months) | 2023 (9 Months) | Change |
|---|---|---|---|
| Total Revenues | $99.1 billion | $109.4 billion | ($10.2 billion) |
| Operating Income | $3.4 billion | $10.3 billion | ($6.9 billion) |
| Net Income | $2.5 billion | $7.6 billion | ($5.1 billion) |
| Income Tax Expense | $726 million | $2.3 billion | ($1.6 billion) |
Segment Performance
Valero's operations are categorized into three primary segments: Refining, Renewable Diesel, and Ethanol. Each segment has shown varying performance metrics in 2024 compared to 2023.
Refining Segment
The Refining segment generated revenues of $94.5 billion in the first nine months of 2024, down from $102.9 billion in 2023. The operating income for this segment decreased to $3.5 billion from $9.9 billion.
| Refining Segment Metrics | 2024 (9 Months) | 2023 (9 Months) | Change |
|---|---|---|---|
| Revenues | $94.5 billion | $102.9 billion | ($8.4 billion) |
| Operating Income | $3.5 billion | $9.9 billion | ($6.4 billion) | Throughput Volumes (thousand bpd) | 2,885 | 2,974 | (89) |
Renewable Diesel Segment
The Renewable Diesel segment reported revenues of $1.9 billion in the first nine months of 2024, compared to $2.9 billion in 2023. The operating income decreased to $337 million from $768 million.
| Renewable Diesel Segment Metrics | 2024 (9 Months) | 2023 (9 Months) | Change |
|---|---|---|---|
| Revenues | $1.9 billion | $2.9 billion | ($1 billion) |
| Operating Income | $337 million | $768 million | ($431 million) |
Ethanol Segment
The Ethanol segment achieved revenues of $2.7 billion for the first nine months of 2024, down from $3.4 billion in 2023. The operating income also fell to $268 million from $363 million.
| Ethanol Segment Metrics | 2024 (9 Months) | 2023 (9 Months) | Change |
|---|---|---|---|
| Revenues | $2.7 billion | $3.4 billion | ($0.7 billion) |
| Operating Income | $268 million | $363 million | ($95 million) |
Cash Flow and Capital Expenditures
In the first nine months of 2024, Valero generated $5.6 billion in cash from operations. The company made $1.5 billion in capital investments during the same period and returned $3.7 billion to stockholders through stock buybacks and dividends.
| Cash Flow Metrics | 2024 (9 Months) |
|---|---|
| Cash from Operations | $5.6 billion |
| Capital Investments | $1.5 billion |
| Stockholder Returns | $3.7 billion |
Debt and Liquidity
As of September 30, 2024, Valero's total liquidity was reported at $10.3 billion. The company reduced its outstanding debt by repaying $167 million in senior notes during the first nine months of 2024.
| Debt and Liquidity Metrics | September 30, 2024 |
|---|---|
| Total Liquidity | $10.3 billion |
| Debt Repayment | $167 million |
How Valero Energy Corporation (VLO) Makes Money
Revenue Streams
Valero Energy Corporation generates revenue primarily through three segments: Refining, Renewable Diesel, and Ethanol. As of September 30, 2024, the revenues from these segments are detailed below:
| Segment | Revenue (Nine Months Ended September 30, 2024) | Revenue (Nine Months Ended September 30, 2023) | Change |
|---|---|---|---|
| Refining | $94,519 million | $102,924 million | $(8,405 million) |
| Renewable Diesel | $1,888 million | $2,990 million | $(1,102 million) |
| Ethanol | $2,718 million | $3,438 million | $(720 million) |
| Total Revenue | $99,125 million | $109,352 million | $(10,227 million) |
Refining Segment Performance
The refining segment is the largest contributor to Valero's revenue, accounting for approximately 95% of total revenue. The decrease in revenue from this segment in 2024 was primarily due to lower product prices for petroleum-based transportation fuels. In the first nine months of 2024, the operating income from the refining segment was:
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Operating Income | $3,534 million | $9,934 million | $(6,400 million) |
| Adjusted Operating Income | $3,547 million | $9,951 million | $(6,404 million) |
| Refining Margin | $8,999 million | $15,534 million | $(6,535 million) |
| Throughput Volumes (thousand barrels per day) | 2,885 | 2,974 | $(89) |
Renewable Diesel Segment Performance
The Renewable Diesel segment has shown a decline in operating income due to lower product prices. The performance metrics for this segment are as follows:
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Operating Income | $337 million | $768 million | $(431 million) |
| Renewable Diesel Margin | $795 million | $1,214 million | $(419 million) |
| Sales Volumes (thousand gallons per day) | 3,588 | 3,460 | 128 |
Ethanol Segment Performance
The Ethanol segment also experienced a decline in revenue and operating income. Key metrics for this segment include:
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Operating Income | $268 million | $363 million | $(95 million) |
| Ethanol Margin | $747 million | $806 million | $(59 million) |
| Production Volumes (thousand gallons per day) | 4,508 | 4,319 | 189 |
Overall Financial Performance
For the first nine months of 2024, Valero reported a significant decrease in net income attributable to stockholders:
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Net Income Attributable to Stockholders | $2,649 million | $7,931 million | $(5,282 million) | Income Tax Expense | $726 million | $2,288 million | $(1,562 million) |
Cash Flow and Capital Expenditures
Valero's cash flow generated from operations in the first nine months of 2024 was:
| Metric | 2024 | 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $5,613 million | $7,990 million |
| Capital Expenditures | $(399 million) | $(468 million) |
These financial figures illustrate Valero Energy Corporation's revenue generation strategies and the impact of market conditions on its financial performance as of 2024.
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Article updated on 8 Nov 2024
Resources:
- Valero Energy Corporation (VLO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Valero Energy Corporation (VLO)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Valero Energy Corporation (VLO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.