Valero ( NYSE: VLO ) -2.9% in Thursday's trading despite easily beating estimates for Q2 adjusted earnings and revenues,as investors appear to be focusing on the future - and they see a recession coming , as U.S. GDP contracted for the second straight quarter.
Q2 net income attributable to shareholders skyrocketed to a quarterly record $4.7B, or $11.57/share, from $162M, or $0.39/share, in the year-earlier quarter, and revenues nearly doubled Y/Y to $51.6B.
Q2 refining throughput margin hit $30/bbl, more than double the Q1 result; total refining margin quadrupled to $8.09B from $2.05B in the prior-year quarter.
But as Jinjoo Lee of The Wall Street Journal 's Heard On The Street column points out, the latest data seems to be signaling a slowdown in demand, especially for gasoline.
Investors have not been reassured by comments from Valero's ( VLO ) earnings conference call that gasoline demand has returned to pre-pandemic levels and diesel demand is trending above pre-pandemic levels; in fact, demand has improved after stalling in early July, executives said.
Valero's ( VLO ) Q2 results were even better than expected , driven by extremely high margins and high volumes, Wells Fargo analysts said, as "refining operating income [of] $6.21B exceeded our $5.29B estimate with refining margin $1.17/bbl above and opex marginally above expectations... Refining volumes exceeded expectations across all four regions with better than expected gross margin as well."
Valero's ( VLO ) stock price return shows a 40% YTD gain and a 65% increase during the past year .
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Valero hauls in record quarterly profit but shares succumb to recession fears