Valero Energy Corporation

Valero reported second-quarter 2026 net income attributable to stockholders of $3.7 billion, or $12.62 per share, compared with $714 million, or $2.28 per share, in the second quarter of 2025. Excluding adjustments, adjusted net income was also $3.7 billion, or $12.54 per share. Refining operating income was $4.5 billion versus $1.3 billion a year ago; Renewable Diesel operating income was $717 million versus an operating loss of $79 million; and Ethanol operating income was $318 million versus $54 million. Refining throughput averaged 3 million barrels per day, refining cash operating expenses were $4.70 per barrel, and the company produced $5.6 billion of operating cash flow. For the third quarter, Valero expects refining throughput of 1.78 million-1.83 million barrels per day in the Gulf Coast, 460,000-480,000 in the Mid-Continent, 110,000-120,000 in the West Coast, and 450,000-470,000 in the North Atlantic; refining cash operating expenses should be about $4.75 per barrel, renewable diesel sales about 3.5 million gallons per day, ethanol production about 4.8 million gallons per day, net interest expense about $140 million, and D&A about $700 million. Full-year 2026 capital investments attributable to Valero are expected to be approximately $2 billion, and G&A is expected to be approximately $960 million.

Lane Riggs framed the quarter as strong across all three segments, emphasizing exceptional operational and commercial execution amid volatile geopolitical and macro conditions. He highlighted the company’s strong balance sheet, recent $1.20 per share dividend declaration, and the planned $230 million FCC optimization project at St. Charles, which is expected to boost higher-value products in the third quarter. His tone was confident and disciplined: constructive on the market, but still focused on capital allocation discipline and asset optimization rather than aggressive expansion.

Harminder Bhullar detailed the quarter’s financial strength, noting $3.7 billion of net income, $5.6 billion of operating cash flow, and $2.6 billion of stockholder cash returns for a 59% payout ratio. He said Valero ended with $7.9 billion of cash and cash equivalents, $9.1 billion of total debt, $2.2 billion of finance lease obligations, and an 11% debt-to-capitalization ratio net of cash, while building $2.1 billion of cash during the quarter. He also reiterated full-year 2026 capital investments of about $2 billion, with roughly $1.7 billion for sustaining the business, and said the company is preserving optionality by keeping cash above its long-term $4 billion to $5 billion target.

Analysts focused on the jump from Q2 to Q3, and management said third-quarter refining margins and capture rates look constructive relative to Q2, with feedstock costs improving and jet, gasoline, and export markets helping. Questions also centered on cash deployment, and Bhullar said Valero can build cash and return capital at the same time, while still favoring buybacks over merely holding excess cash if no better uses emerge. On renewables, Eric Fisher said the D4 RIN and RVO backdrop supports renewable diesel through 2026-2027 and that ethanol is benefiting from both gasoline/octane strength and the production tax credit, while also noting that Valero does not plan major RD expansion given policy uncertainty.