Valero Energy Corp. (NYSE:VLO) stock declined on Thursday after the company reported first-quarter 2026 earnings results.

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Earnings Snapshot

The energy firm reported quarterly revenue of $32.4 billion, surpassing the analyst consensus estimate of $30.7 billion.

Concurrently, adjusted earnings reached $4.22 per share, above the $3.16 per share expected by Wall Street.

Operating income came in at $1.73 billion versus a loss of $900 million a year ago quarter.

Valero ended the quarter with $5.7 billion of cash and cash equivalents and $8.4 billion of total debt.

Separately, on Jan. 22, the company increased its quarterly dividend on common stock from $1.13 to $1.20 per share.

Segment Performance

Operational results showed the Refining segment was the largest contributor to operating income at $1.8 billion. This is a substantial improvement from the operating loss of $530 million recorded in the year-ago quarter.

Refining throughput averaged 2.9 million barrels per day in the quarter.

The Renewable Diesel segment, including the Diamond Green Diesel joint venture, generated operating income of $139 million versus a $141 million loss a year earlier. This is led by improved margins and volumes. Sales volumes averaged 3 million gallons per day.

The Ethanol segment reported operating income of $90 million, compared with $20 million in the prior-year quarter, while production volumes averaged 4.6 million gallons per day.

Strategic Investments

Valero continues to advance its FCC Unit optimization project at the St. Charles Refinery, aimed at improving production of higher-value products. The company expects the $230 million project to be completed and begin operations in the third quarter of 2026.

Second Quarter Outlook

Valero projects a decline in Refining throughput due to reduced operations at Port Arthur and the temporary shutdown of the Benicia refinery. It is anticipated to reduce second-quarter EPS by approximately nine cents.

Capital spending will also reflect repair work related to the Port Arthur incident (a scaffolding collapse), with part of the costs expected to be offset by insurance recoveries.

Valero expects refining throughput for the second quarter of 2026 to be 1.69–1.74 million bpd in the Gulf Coast, 450–470 thousand bpd in the Mid-Continent, 120–130 thousand bpd on the West Coast and 480–500 thousand bpd in the North Atlantic.

The company sees renewable diesel sales at ~320 million gallons with unit costs of 46 cents per gallon. Meanwhile, Valero anticipates ethanol output at 4.7 million gallons per day with operating costs of 39 cents per gallon.

VLO Price Action: VLO shares were trading slightly lower at $251.36 at publication on Thursday.

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