Valero pumps out strong profit as refining margins rise
(Reuters) - U.S. refiner Valero Energy Corp (VLO.N: Quote) reported a better-than-expected quarterly profit, helped by robust demand for refined products and lower crude costs.
Valero also raised its quarterly cash dividend to 50 cents per share from 40 cents.
The company's shares were up 2.4 percent at $63.99 in premarket trading on Wednesday.
Refiners have been pumping out strong profits due to high crack spreads, the difference between crude oil and prices of refined products, as crude prices have more than halved since June last year due to a supply glut.
Valero expects continued healthy gasoline demand in the fourth quarter, Chief Executive Joe Gorder said in a statement on Wednesday.
Gasoline demand is expected to remain buoyant, helped by lower prices, even after accounting for a seasonal winter downturn in the consumption of motor fuel.
Valero's refining margin rose to $14.38 per barrel in the third quarter ended Sept. 30, from $11.81 per barrel a year earlier.
Net income from continuing operations attributable to Valero's stockholders rose 30 percent to $1.38 billion, or $2.79 per share.
Analysts on average had expected earnings of $2.66 per share, according to Thomson Reuters I/B/E/S. Continued...