SAN ANTONIO (AP) — Valero Energy Corp. said Tuesday that third-quarter profit fell 54 percent as the company was squeezed by thinner margins on gasoline and diesel and smaller discounts on certain types of crude oil that it refines.
Refining income declined sharply, but Valero's ethanol business posted an operating profit, reversing a year-ago loss.
Valero said that gasoline margins have started out weak in the fourth quarter, but it's being helped by cheaper prices for some types of U.S. and Canadian crude oil compared with Brent crude.
The company has been getting a break from those discounts on North American crude, which give it a cost advantage over some competitors.
Third-quarter net income was $312 million, or 57 cents per share, down from $674 million, or $1.21 per share, a year earlier. The 2012 results would have been $1.90 per share excluding charges for a write-down and severance expense related to a refinery in Aruba.
Revenue rose 4 percent to $36.14 billion from $34.73 billion.
Analysts expected the company to earn 50 cents per share on revenue of $29.16 billion, according to FactSet.
Refining operating income shrunk to $600 million from $1.53 billion a year earlier. Ethanol produced an operating profit of $113 million compared with a loss of $73 million a year ago.
Valero refineries handled an average of 2.8 million barrels per day, up 172,000 barrels from a year ago as there were fewer shutdowns caused by maintenance and weather.
Shares of Valero rose 70 cents, or 1.8 percent, to $40.15 in morning trading. As of Monday, they had risen 16 percent in 2013.