Valero Energy profit beats estimates on higher ethanol margins
(Reuters) -- Valero Energy Corp, the largest independent US refiner, reported a better-than-expected quarterly profit as higher margins in its ethanol unit more than offset weakness in its refining business.
The company reported an operating profit of $126 million in its ethanol business for the fourth quarter, compared to a loss of $13 million a year earlier, helped by lower corn and stronger ethanol prices.
However, the company's refining margins were hurt by the narrowing gap between the price of US crude and globally-traded Brent crude, to which refined products prices are tied.
Refining throughput margin fell to $8.22 per barrel in the fourth quarter, from $10.87 per barrel a year earlier.
Valero's refineries operated at 95% throughput capacity utilization in the quarter, in line with the preceding quarter.
The company said it expects to spend about $2.7 billion in 2017, more than the $2 billion it spent last year.
Net income attributable to shareholders rose to $367 million, or 81 cents per share, in the fourth quarter ended Dec. 31, from $298 million, or 62 cents per share, a year earlier.
Valero also reported adjusted earnings of 81 cents per share, while analysts on average had expected earnings of 77 cents, according to Thomson Reuters I/B/E/S.
Operating revenue rose 10.3% to $20.71 billion, handily beating estimates of $17.42 billion.
Reporting by Arathy S Nair in Bengaluru; Editing by Shounak Dasgupta
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