UPDATE 1-Valero profit beats estimates as it refines more crude

Tue Oct 29, 2013 9:29am EDT
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* Refining volumes rise by 172,000 barrels

* Ethanol business reports operating income vs loss year earlier

* Shares rise 2 percent before the bell (Adds analyst comment, details from statement, background, shares)

Oct 29 (Reuters) - Valero Energy Corp's third-quarter profit beat analysts' estimates by a wide margin as the U.S. Gulf Coast refiner processed more crude oil and sold more ethanol at a higher price.

The company's shares rose 2 percent in premarket trading.

Refining volumes jumped by 172,000 barrels per day to average 2.8 million barrels, mainly due to less unplanned maintenance activity and closures related to bad weather.

The company's ethanol producing business reported an operating income of $113 million in the quarter, compared with an operating loss of $73 million a year earlier.

The business contributed a fifth of the total operating profit in the third quarter.

"Third-quarter refining margins were challenged, but our story remains intact," Chief Executive Bill Klesse said in a statement on Tuesday.   Continued...