VLO

Valero Energy reported a surge in third-quarter 2026 earnings on Thursday, with net income climbing to $6.8 billion from $1.1 billion a year earlier as stronger refining margins more than offset a decline in processing volumes. The U.S. refining giant posted diluted earnings of $23.89 per share, compared with $3.53 in the third quarter of 2025. Adjusted earnings rose to $23.90 per share from $3.66, while quarterly revenue jumped 43% to $46.1 billion. The biggest contribution came from Valero's refining business, which generated $8.8 billion in operating income, compared with $1.6 billion a year earlier. Refining margins nearly tripled to $39.24 per barrel of throughput from $13.14 per barrel in the comparable 2025 period, highlighting the substantial improvement in profitability from processing crude oil into transportation fuels. The earnings surge came despite a roughly 4% year-over-year decline in refinery throughput, which averaged 2.97 million barrels per day (bpd), down from 3.09 million bpd. Valero's U.S. Gulf Coast refining operations accounted for much of the improvement, reporting operating income of $5.25 billion, compared with $940 million a year earlier. Its North Atlantic operations generated $1.84 billion, up from $532 million. The results underscore the impact of elevated refining margins on the downstream oil industry. Earlier in 2026, Valero had identified resilient global transportation fuel demand, constrained refining capacity and geopolitical supply disruptions as factors supporting stronger refining economics. Valero's renewable diesel operations also delivered a turnaround. The Diamond Green Diesel joint venture generated operating income of $353 million, reversing a $28 million loss in the third quarter of 2025. Renewable diesel sales averaged 3.4 million gallons per day. Meanwhile, Valero's ethanol segment reported operating income of $272 million, up from $183 million a year earlier. Ethanol production reached a quarterly record of 4.8 million gallons per day. On the operational front, Valero completed its fluid catalytic cracking (FCC) unit optimization project at the St. Charles refinery during the quarter. The project, previously budgeted at $230 million, was finished on schedule and within budget and is expected to increase production capacity for higher-value products, including gasoline and alkylate. Strong earnings translated into substantial cash generation. Valero reported $6.9 billion in operating cash flow during the quarter, while adjusted operating cash flow reached $7.3 billion. Capital investments totaled $432 million. The company also repaid $526 million in maturing debt and ended September with $9.8 billion in cash and cash equivalents against $8.6 billion in total debt. Valero said shareholder cash returns represented 52% of adjusted operating cash flow during the quarter. The latest results highlight the sensitivity of refinery earnings to fuel market conditions, with sharply higher processing margins driving substantial profit growth even as overall throughput declined. By Charles Kennedy for Oilprice.com More Top Reads From Oilprice.com - Petrobras' Deepwater Push Sets Off a Race for Offshore Vessels - Oil Prices Climb Above $110 as Middle East Supply Fears Persist - Russia to Send First Diesel Tanker to U.S. on Thursday Oilprice Intelligence brings you the signals before they become front-page news. This is the same expert analysis read by veteran traders and political advisors. Get it free, twice a week, and you'll always know why the market is moving before everyone else. You get the geopolitical intelligence, the hidden inventory data, and the market whispers that move billions - and we'll send you $389 in premium energy intelligence, on us, just for subscribing. Join 400,000+ readers today. Get access immediately by clicking here.

The Q3 earnings season continues its rapid pace, with several companies, including Valero Energy VLO, RTX RTX, and Interactive Brokers IBKR delivering record-breaking results while also sporting favorable Zacks Ranks. Valero Energy, one of the largest independent petroleum refiners, delivered a highly positive release, benefiting significantly from the favorable refining environment. Adjusted earnings totaled $23.90 per share, comfortably exceeding the Zacks Consensus EPS estimate of $21.23 and climbing more than 550% YoY. Revenues of roughly $46.1 billion also exceeded the Zacks Consensus estimate of $38.8 billion, reflecting a beat of nearly 19%. VLO posted record quarterly profit, with net income reaching $6.8 billion compared to $1.1 billion in the year-ago period. Refining operating income soared to $8.8 billion from $1.6 billion, reflecting a sizable improvement in margins. Valero also saw record quarterly ethanol production of 4.8 million gallons per day, with its refineries operating at near-record utilization rates. The stock sports a favorable Zacks Rank #1 (Strong Buy), with its earnings outlook benefiting heavily from positive revisions over recent months. Image Source: Zacks Investment Research RTX, a leading aerospace and defense company and current Zacks Rank #2 (Buy), delivered strong quarterly results,with adjusted earnings of $2.26 per share exceeding the Zacks Consensus EPS estimate of $1.78 by nearly 27% and climbing 33% YoY. Revenues of $24.5 billion similarly exceeded the $24.0 billion consensus estimate by 4%, reflecting 11% YoY growth. RTX exited the period with a record $340 billion backlog, including $176 billion from commercial aerospace and $164 billion from defense. The impressive backlog provides strong revenue visibility, undoubtedly a major positive for investors. EPS revisions for its current and next fiscal year remain on a positive trajectory, suggesting growth rates of 17% for FY26 and 6.7% in FY27. Image Source: Zacks Investment Research Interactive Brokers, an automated global electronic brokerage firm, delivered another solid quarter, benefiting from continued account growth and higher trading activity. Adjusted earnings of $0.67 per share matched the Zacks Consensus estimate, climbing 17.5% YoY. Revenues of $1.9 billion exceeded the $1.8 billion consensus estimate by 1.9%, reflecting 16.3% YoY growth. Importantly, customer accounts reached a record 5.58 million, climbing 35% YoY. Customer equity similarly grew 27% to nearly $965 billion, while net interest income increased 19% to roughly $1.2 billion. The company also raised its quarterly dividend by more than 70%, reflecting a strong commitment to increasingly rewarding shareholders. IBKR sports a favorable Zacks Rank #2 (Buy), with annual EPS estimates continuing to remain on a bullish trajectory. Image Source: Zacks Investment Research Bottom Line The Q3 earnings season continues to deliver impressive results, with Valero Energy VLO, RTX RTX, and Interactive Brokers IBKR all posting quarterly records. In addition to reporting quarterly records, all three sport favorable Zacks Ranks, reflecting positive earnings outlooks and providing a constructive near-term backdrop for shares. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report Valero Energy Corporation (VLO) : Free Stock Analysis Report RTX Corporation (RTX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Phillips 66 PSX is set to report third-quarter 2026 results on Oct. 28, before the opening bell. The Zacks Consensus Estimate for third-quarter earnings is pegged at $12.02 per share, implying an improvement of almost 377% from the year-ago reported number. It has witnessed one upward estimate revision in the past seven days. The Zacks Consensus Estimate for third-quarter revenues is currently pegged at $33.7 billion, suggesting a decline of 3.6% from the year-ago actuals. Image Source: Zacks Investment Research PSX beat the consensus estimate for earnings in each of the trailing four quarters, with the average surprise being 62.6%. This is depicted in the graph below: Our proven model doesn't predict an earnings beat for PSX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That isn't the case here. The leading refining player has an Earnings ESP of 0.00%. PSX currently sports a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. To understand how oil prices behaved in the September quarter, let's analyze the commodity prices from the data provided by the U.S. Energy Information Administration ("EIA"). The average Cushing, OK, WTI spot prices for July, August and September of this year were $80.46 per barrel, $83.90 per barrel and $97.31 per barrel, respectively, per EIA data. Commodity prices were $68.39 per barrel, $64.86 per barrel and $63.96 per barrel in the prior-year, respective quarters, according to the EIA. A constructive oil-price backdrop, driven by the Iran war, is likely to have hurt the refining business of Phillips 66 in the third quarter, since the input costs to produce final products like gasoline, diesel fuel and others were higher. A similar dynamic is likely to have affected Par Pacific Holdings, Inc. PARR and Valero Energy Corporation VLO, belonging to the same space. However, the high utilization of refineries in the United States to meet resilient demand is likely to have largely offset the negative impacts of high input costs. PSX's stock has surged 110.8% over the past year, underperforming the industry's 132.9% growth. PARR has jumped 100.8% over the same time frame, while VLO has gained 149.2%. One-Year Price Chart Image Source: Zacks Investment Research Despite PSX's stock price underperforming the industry, the company appears relatively overvalued. The company's current trailing 12-month enterprise value/earnings before interest, tax, depreciation and amortization (EV/EBITDA) is 12.52x, reflecting that it is trading at a premium compared with the industry average of 6.36x. VLO and PARR are valued lower at 9.00x and 3.37x, respectively. Image Source: Zacks Investment Research PSX noted that there aren't enough refineries or products globally right now because much refining capacity is offline and fuel inventories are low. This shortage helps keep refining margins, also called crack spreads, high. Management believes these shortages may take longer to resolve than in 2022, which is expected to boost the energy major's refining profits in the September quarter and in 2027. The broader scenario is also likely to favor other refiners like VLO and PARR. Although a leading refiner, PSX, unlike most of its refining peers, has diversified into midstream and chemicals. Along with investing in refining operations, Phillips 66 is allocating significant capital to midstream. The midstream business, by its very definition, is stable since the company generates stable cash flows as the assets are being utilized for the long term and is less vulnerable to commodity price volatility. Hence, having a diversified business model, PSX is insulated from commodity price volatility to a great extent. Given its relatively stable business model, it might be the ideal time for investors to bet on the stock. In fact, investors are willing to pay a premium for this stock as reflected in the valuation picture. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Phillips 66 (PSX) : Free Stock Analysis Report Valero Energy Corporation (VLO) : Free Stock Analysis Report Par Pacific Holdings, Inc. (PARR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Liberty Energy Inc. LBRT reported third-quarter 2026 adjusted earnings of 6 cents per share, missing the Zacks Consensus Estimate of 8 cents by 25%. However, the bottom line improved from the year-ago quarter's adjusted loss of 6 cents. Strong operational execution and modest pricing gains were partially offset by drilling-related delays and cost inflation. LBRT's revenues totaled $1.2 billion, beating the Zacks Consensus Estimate of $1.17 billion by approximately 1.9%. The top line increased 26.3% from $947.4 million a year ago, supported by strong fleet utilization and improved pricing. Liberty Energy Inc. price-consensus-eps-surprise-chart | Liberty Energy Inc. Quote Liberty Energy's adjusted EBITDA was $141.6 million, increasing 10.9% from $127.7 million in the year-ago quarter. However, the figure declined 6.3% sequentially from $151.1 million. Liberty Energy reported total operating costs and expenses of $1.18 billion in the third quarter, increasing 23.9% from $949.8 million in the year-ago period. Cost of services increased 29.3% year over year to $995 million, reflecting inflationary pressures on operations. General and administrative expenses rose to $69.5 million from $58.3 million a year ago. Meanwhile, depreciation, depletion and amortization expenses decreased 7.5% to $113.7 million. Operating income totaled $19.3 million, compared with an operating loss of $2.4 million in the prior-year quarter. During the reported quarter, Liberty Energy continued strengthening its completions business through improved fleet utilization, advanced technologies and modest pricing gains. However, drilling-related delays partially offset the benefits as customers worked to replenish well inventories following accelerated completion activity in the second quarter. The company achieved record natural gas substitution, with natural gas accounting for more than 60% of the total fuel consumed by its fracturing fleets. This translated into annualized fuel savings exceeding $1 billion for customers, supported by continued investments in natural gas-powered equipment and digital optimization technologies. Liberty Power Innovations entered into a strategic development agreement with a leading frontier AI laboratory and a dedicated infrastructure platform to provide 1.2 gigawatts of integrated power services for data center campuses. The agreement includes significant capacity fee prepayments and targets execution of an initial energy service agreement covering approximately 500 megawatts by December 2026. The project envisages phased energization from the fourth quarter of 2027 through the first quarter of 2029. Management indicated that the capacity fee prepayments would amount to hundreds of millions of dollars, supporting the development of large-scale power infrastructure. Liberty Energy also completed advanced grid integration testing in collaboration with the National Laboratory of the Rockies. The testing validated the company's power generation technologies and control systems under simulated real-world grid conditions, strengthening its ability to support complex data center power requirements. As of Sept. 30, 2026, Liberty Energy had approximately $119 million in cash and cash equivalents. Total debt stood at approximately $1.3 billion, primarily comprising senior convertible notes issued during the first quarter. Total liquidity, including availability under its revolving credit facility, amounted to $669 million. The company incurred net capital expenditures of $621.9 million during the reported quarter, compared with $113 million a year ago. Spending included approximately $450 million in power generation deposits and other investments in power generation, alongside digiFleet equipment, capitalized maintenance and related projects. The Zacks Rank #4 (Sell) company distributed approximately $15 million through cash dividends during the quarter. Subsequently, its board approved an 11% increase in the quarterly dividend to 10 cents per share, payable Dec. 18, 2026, to shareholders of record as of Dec. 4. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Management highlighted improving North American completion market fundamentals, supported by stronger producer economics, tightening fracturing capacity and sustained demand for next-generation equipment. Fleet attrition and industry underinvestment have constrained available capacity, creating opportunities for further pricing improvements. Looking ahead, Liberty Energy expects fourth-quarter weather-related and holiday seasonality to be partially offset by continued demand strength and activity deferred from the third quarter. Management also anticipates additional pricing opportunities heading into 2027, although labor inflation and other operating cost pressures remain challenges. In its distributed power business, the company expects accelerating artificial intelligence infrastructure development to drive demand for integrated power solutions. Management is also advancing nonrecourse project-level financing arrangements, with financing activity expected to begin in early 2027 as projects progress. While we have discussed LBRT's third-quarter results in detail, let us take a look at three other key reports in this space. Halliburton Company HAL reported third-quarter 2026 adjusted earnings of 60 cents per share, surpassing both the Zacks Consensus Estimate and the year-ago adjusted earnings of 58 cents. The improvement was supported by stronger drilling activity and international operations. Revenues of $5.7 billion rose 1.8% year over year and surpassed the Zacks Consensus Estimate by 2%. The top-line improvement was driven by Drilling and Evaluation growth, while lower North American stimulation activity remained a headwind. As of Sept. 30, 2026, the company held $1.84 billion in cash and equivalents and $7.1 billion in long-term debt. Total shareholders' equity stood at $11.16 billion. Kinder Morgan, Inc. KMI reported third-quarter 2026 adjusted earnings of 35 cents per share, beating the Zacks Consensus Estimate of 33 cents by 6.1%. Earnings increased 20.7% from 29 cents in the year-ago quarter. Revenues increased 9.3% year over year to $4.53 billion from $4.15 billion. Revenues surpassed the consensus estimate of $4.38 billion by 3.4%. Strong quarterly results benefited from higher natural gas transportation and gathering volumes, alongside improved contributions from the Terminals and CO2 businesses. As of Sept. 30, 2026, cash and cash equivalents totaled $918 million, compared with $63 million at 2025-end. Net debt stood at $32.23 billion. Valero Energy Corporation VLO reported third-quarter 2026 adjusted earnings of $23.90 per share, up 553% from $3.66 a year ago. Reported earnings were $23.89 per share compared with $3.53 in the prior-year quarter. Revenues climbed 43.3% year over year to $46.10 billion from $32.17 billion, while also surpassing the Zacks Consensus Estimate by 23.29%. The results benefited from substantially stronger refining margins and improved profitability across the Renewable Diesel and Ethanol segments. Refining throughput averaged 2.97 million barrels per day, down from 3.09 million barrels per day a year earlier. Valero ended September with $9.84 billion in cash and cash equivalents. Total debt stood at $8.58 billion, while finance lease obligations totaled $2.42 billion. The debt-to-capitalization ratio, net of cash, was 4% at the end of the third quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Liberty Energy Inc. (LBRT) : Free Stock Analysis Report Halliburton Company (HAL) : Free Stock Analysis Report Valero Energy Corporation (VLO) : Free Stock Analysis Report Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Valero Energy Corporation's VLO management highlighted favorable refining fundamentals, widening crude discounts and resilient transportation fuel demand during its third-quarter 2026 earnings call. Executives expressed confidence in the company's competitive position despite volatile energy markets. Management also outlined fourth-quarter operating expectations, shareholder returns and opportunities to improve refinery flexibility. Higher freight costs and potential demand destruction emerged as important discussion points. Valero Energy reported adjusted earnings of $23.90 per share for the third quarter of 2026, surpassing the Zacks Consensus Estimate of $21.28. Quarterly revenues totaled $46.10 billion, exceeding the Zacks Consensus Estimate of $37.39 billion. Valero Energy Corporation price-consensus-eps-surprise-chart | Valero Energy Corporation Quote Randy Hawkins, vice president of Crude and Feedstocks Supply and Trading, explained that elevated shipping costs have widened crude discounts, benefiting Valero's Gulf Coast refining system. Hawkins noted that shipping a very large crude carrier from the Gulf Coast to Asia now costs approximately $30-$35 per barrel, compared with around $5 in 2025. He emphasized that access to discounted heavy sour crude provides a competitive advantage. Additional supplies from Canada, Venezuela and the Middle East underpin management's constructive long-term outlook. Gary Simmons, executive vice president and chief operating officer, reported limited evidence of demand destruction despite elevated fuel prices. U.S. wholesale gasoline sales increased 4% year over year on a seven-day average basis, while distillate sales rose 2%. Export demand remained strong across key markets. Responding to questions from Piper Sandler and TD Cowen, Simmons acknowledged uncertainty around fuel-price sensitivity. He cautioned that further increases in crude prices could compress refining margins. Chief financial officer Homer Bhullar projected fourth-quarter refining throughput of 1.855- 1.905 million barrels per day in the Gulf Coast region. Management expects Mid-Continent throughput of 440,000-460,000 barrels per day and North Atlantic throughput of 480,000-500,000 barrels. Refining cash operating expenses are projected at approximately $4.85 per barrel. Simmons highlighted favorable heavy sour crude discounts, gasoline blending economics and improving jet fuel differentials. He also indicated that deferred industry maintenance could contribute to heavier refinery turnaround activity in 2027. The Renewable Diesel segment generated third-quarter operating income of $353 million, recovering from a $28 million loss a year earlier. Eric Honeyman, senior vice president of Renewables Operations and Low Carbon Fuels, attributed margin variability partly to feedstock pricing delays, operational disruptions and renewable identification number volatility. Honeyman remained positive about fourth-quarter renewable diesel margins. He also outlined incremental ethanol capacity expansion opportunities and carbon sequestration projects targeting completion between late 2027 and mid-2028. Bhullar emphasized balance-sheet flexibility following strong cash generation. Valero ended September with $9.8 billion in cash and cash equivalents. Although management's long-term cash target remains $4-$5 billion, Bhullar defended retaining additional liquidity against commodity volatility and potential working-capital requirements. The company returned 52% of adjusted operating cash flow to its shareholders during the quarter. Bhullar indicated that excess cash would ultimately support shareholder distributions, with repurchases providing flexibility alongside sustainable dividend growth. Chairman and chief executive officer Lane Riggs highlighted completion of the $230 million St. Charles FCC optimization project on schedule and within budget. Simmons said the project exceeded its investment-decision EBITDA expectations during the quarter, despite operating for only part of the period. Riggs identified additional opportunities in heavy sour crude processing, feedstock flexibility and refinery debottlenecking. Management maintained approximately $2 billion in planned 2026 capital investments attributable to Valero. Management remained constructive on refining fundamentals while acknowledging uncertainties surrounding crude prices, shipping disruptions and industry maintenance requirements. Riggs also expressed interest in selective refining acquisitions but emphasized that investment decisions would continue to reflect returns across the economic cycle rather than unusually favorable current margins. The company's priorities remain operational reliability, competitive feedstock sourcing, disciplined spending and sustainable shareholder returns. VLO currently sports a Zacks Rank #1 (Strong Buy), indicating favorable earnings estimate revisions and stronger near-term performance potential under the Zacks ranking framework. You can see the complete list of today's Zacks #1 Rank stocks here. Valero's Growth, Momentum and VGM Scores of A reinforce its favorable positioning across these investment characteristics. However, the Value Score of C indicates a comparatively less compelling valuation profile. The combination of a top Zacks Rank and an A-rated VGM Score is favorable under the Zacks methodology. Nevertheless, the stock's Zacks Rank may change as analysts revise earnings estimates following the third-quarter results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Valero Energy Corporation (VLO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Valero Energy just posted one of the punchiest refinery quarters on record. Q3 2026 net income reached US$6.8b, or US$23.96 per share, yet the stock slipped 1.7% to US$419.16 on the first full trading day after the release. That gap between a softer share price and heavy earnings firepower is the story. Investors came in after a strong 90 day run and found a refiner printing US$46.1b of quarterly revenue and US$6.9b of operating cash flow. The headline is simple: profit strength is colliding with market caution. Love Valero Energy's heavy earnings firepower but uneasy about buying after a strong price run and a cautious market reaction? Line up this quarter against peers using the 30 resilient stocks with low risk scores. - Total Revenue, Q3 2026 vs. Q3 2025: US$46,098m vs. US$30,341m (up about 52%) - Net Income, Q3 2026 vs. Q3 2025: US$6,828m vs. US$1,092m (up more than 6x) - Basic EPS, Q3 2026 vs. Q3 2025: US$23.96 vs. US$3.53 (up more than 6x) - Refining Throughput, Q3 2026: approximately 3.0 million barrels per day, compared with lower utilization in the prior-year period, reflecting stronger refinery runs across the Valero Energy system Earnings grab attention, but investors who care about what a business is worth often focus on the cash coming in and out of the operation. Valero Energy's latest cash generation is what feeds any valuation model, and on those cash flows alone the stock could be a striking 44% undervalued. One of the key bullish claims around Valero Energy is that higher quality barrels and smarter projects can push more cash to the bottom line. "FCC optimization at the St. Charles refinery, a US$230 million project scheduled to start up in the second half of 2026, is aimed at higher yields of high value products like alkylate." That milestone is now in the rear-view mirror. Management confirmed St. Charles was completed on time and on budget, and that it exceeded its FID EBITDA hurdle in Q3, contributing to US$8.8b of refining operating income and strong cash flow. This in turn helped fund sizable buybacks and a 52% payout ratio this quarter. Not everyone reads the same price the same way. → See the lower figure this Narrative lands on, and how it gets there. The key worry is that Valero Energy has pushed its refineries so hard that there is no room left for volume growth, leaving earnings exposed if runs ease. "Record refining throughput at 3.1 million barrels per day and 98% utilization, if treated as a new normal, could leave limited headroom to grow volumes further and expose revenue to any pullback in utilization or demand." Q3 throughput near 3.0 million barrels per day with US$8.8b refining operating income shows the system still running close to those prior records. The bear point on volume headroom remains intact, since the upside is coming from rich margins and project mix, not extra barrels. Valero Energy just showed how strong reported numbers can still meet a cautious share price. The real opportunity sits in finding companies that could be undervalued before the market adjusts. - Company 1 - 40% below our estimate - uses government-backed trade-in subsidies and eco-focused policies to expand a refurbishing and recommerce device network. - Company 2 - 45% below our estimate - integrates a newly acquired regional bank to widen its low cost deposit base and support loan growth under conservative credit standards. - Company 3 - 42% below our estimate - expands beyond solar trackers into storage and inverter offerings so a higher margin hardware mix can help absorb project delays. That is three of the list. See all 29 potentially undervalued companies → This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include VLO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

HF Sinclair Corporation DINO is set to report third-quarter 2026 results on Oct. 28, before the market opens. The Zacks Consensus Estimate for third-quarter earnings is pegged at $7.99 per share, implying a surge of 227.5% from the year-ago reported number. DINO has witnessed one upward and no downward earnings estimate revisions over the past seven days. The Zacks Consensus Estimate for third-quarter revenues is currently pegged at $7.5 billion, suggesting a 2.8% rise from the year-ago actuals. DINO beat the consensus estimate for earnings in each of the trailing four quarters, delivering an average surprise of 194.9%. This is depicted in the graph below: Image Source: Zacks Investment Research Our proven model does not conclusively predict an earnings beat for DINO this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below. The company has an Earnings ESP of 0.00% and currently sports a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. HF Sinclair is expected to have sustained stable performance in the third quarter, driven by the favorable refining environment. Refining margins are expected to have remained elevated in the third quarter due to supply disruptions through the Strait of Hormuz, constrained refining capacity globally and lower product inventories. In addition, attacks on Russian refining facilities and infrastructure during this time are expected to have further constrained refining capacity, amplifying the tightness in refined product markets. Moreover, the macroeconomic backdrop for its renewable diesel business is expected to have remained favorable. These factors are likely to have supported refining gains and aided DINO's profitability. However, the gains may have been partially offset by elevated crude oil prices in the quarter under review. Per the data from the U.S. Energy Information Administration, the West Texas Intermediate spot crude price averaged $80.46 per barrel in July and $83.90 per barrel in August, further increasing to $97.31 per barrel in September. Notably, these figures are significantly higher than those recorded in the third quarter of 2025. Higher crude prices may have raised input costs for its refining operations, thereby affecting its results. These factors are likely to have affected demand and pricing dynamics, potentially hampering the company's quarterly performance. HF Sinclair shares have soared 130.1% over the past year compared with the 132.8% growth of the composite stocks belonging to the industry. PBF Energy PBF and Valero Energy VLO, two other leading refining players, have gained 138.3% and 151.5%, respectively. Image Source: Zacks Investment Research DINO appears relatively overvalued, at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 6.64X, above the broader industry average of 6.36X, implying that the stock is currently trading at a premium. PBF Energy and Valero Energy are currently trading at a trailing 12-month EV/EBITDA of 5.34X and 7.98X, respectively. Image Source: Zacks Investment Research HF Sinclair's primary earnings driver is its robust network of seven complex refineries across the Mid-Continent, Southwest, Rocky Mountains and Pacific Northwest, with combined processing capacity of 678,000 barrels per day. The company's refining assets can process different crude grades and shift its production mix toward higher-value products like gasoline, jet fuel and diesel in response to changing market conditions. The company is also working on better reliability, crude flexibility and product optimization to enhance margin capture across market cycles. Meanwhile, the company's Midstream and Marketing businesses, alongside its Renewables operations, are expected to complement its refining activities, support cash flow generation and help reduce earnings cyclicality. Beyond the favorable market environment, HF Sinclair's strong balance sheet provides financial flexibility to navigate market volatility and pursue strategic opportunities. The company is also taking steps to sharpen its portfolio and improve the competitiveness of its businesses. In fact, the company has recently announced a decision to separate its Lubricants & Specialties (L&S) business through the capital markets in a tax-efficient transaction, with completion targeted for the second half of 2027. The company believes that this would give both HF Sinclair and L&S a greater strategic focus and the ability to pursue growth opportunities and transactions independently. The outlook for its Refining business remains constructive, driven by continued tightness in the refined products markets and constrained refining capacity globally amid resilient demand. Lower global refined product inventories are expected to have taken time to replenish, thereby supporting refining fundamentals in the near and medium term. PBF Energy has a geographically diverse refining network with large-scale processing capacity and a highly complex refining system. It operates six refineries—Delaware City Refinery, Paulsboro Refinery, Toledo Refinery, Chalmette Refinery, Torrance Refinery and Martinez Refinery— with a combined throughput capacity of 1 million barrels per day and the ability to process a wide range of feedstocks. This diversified refining footprint provides the company exposure to several regional refining markets, supporting higher margins. The refining player is expected to benefit from strong refining fundamentals and elevated crack spreads driven by continued supply disruptions through the Strait of Hormuz and low refined product inventories. Valero Energy is a leading refining player with a robust network of 14 refineries and a combined high-complexity throughput capacity of 3 million barrels per day, which distinguishes it from other independent refiners. VLO's refineries have a combined Nelson Complexity Index of 11.5, which implies that the refineries can process a wide variety of feedstocks, including Venezuelan and Canadian crude, which are generally cheaper compared to other crude grades, convert them into higher-value products and shift product yields according to market conditions. This can help reduce input costs for the company and improve its profitability. VLO recently reported third-quarter adjusted earnings of $23.90, which surpassed the Zacks Consensus Estimate and the year-ago quarter's reported figure. The results benefited from substantially stronger refining margins and improved profitability across the Renewable Diesel and Ethanol segments. Both PBF and VLO currently sport a Zacks Rank #1. HF Sinclair is expected to benefit from strong refining fundamentals, which is currently supported by the disruptions in supply through the Strait of Hormuz. Low product inventories are also expected to support refining margins in the near term. Given the business environment and its portfolio optimization and balance sheet strengthening measures, investors should consider buying DINO stock, sporting a Zacks Rank #1, at present. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report HF Sinclair Corporation (DINO) : Free Stock Analysis Report Valero Energy Corporation (VLO) : Free Stock Analysis Report PBF Energy Inc. (PBF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Western Digital Corporation WDC reported first-quarter fiscal 2027 non-GAAP earnings of $4.64 per share, which surpassed the Zacks Consensus Estimate of $4.09. The bottom line increased 161% year over year and 30% sequentially, exceeding the high end of management's guidance of $4 (+/- 15 cents). The company reported quarterly revenue of $4.38 billion, up 55% year over year and 17% sequentially on the back of robust customer demand and favorable pricing trends. The figure beat the consensus mark of $4.16 billion. Western Digital Corporation price-consensus-eps-surprise-chart | Western Digital Corporation Quote Western Digital shipped 248 exabytes in the quarter, up 22% year over year and 8% sequentially. Nearline products remained the primary growth driver as the company advanced its product transitions. WDC is ramping up its latest-generation ePMR drives, with capacities up to 40TB, and plans to introduce HAMR technology in the first half of calendar 2027. These developments are expected to support stronger year-over-year growth in exabyte shipments. Adoption is advancing faster than in previous technology transitions, with WDC expecting the new platform to account for nearly 30% of nearline shipments in the fiscal second quarter and 50% in the fiscal third quarter of 2027. Western Digital's board of directors declared a quarterly cash dividend of 17.5 cents per share, representing a 17% increase from the previous dividend, payable on Dec. 17, 2026, to shareholders of record as of Dec. 4, 2026. The dividend increase highlights the company's financial momentum and its commitment to returning capital to shareholders. In the past year, shares have gained 173.6% compared with the Zacks Computer-Storage Devices industry's rise of 178.4%. Image Source: Zacks Investment Research Cloud end market revenue reached $3.9 billion (88% of total revenue), rising 54% year over year. Growth was driven by sustained demand for high-capacity nearline HDDs, including the initial ramp-up of its latest ePMR platform. Strong pricing trends further reflect the value and total cost of ownership (TCO) benefits the company offers its customers. Revenues from the Client end market (7%) were up 119% year over year to $320 million. Revenues from the Consumer end market (5%) surged 19% year over year to $193 million. Non-GAAP gross margin expanded to 58.1%, up 1,420 basis points (bps) year over year with incremental gross margin exceeding 80%. A favorable mix of higher-capacity drives, disciplined operational execution and stronger pricing across its portfolio drove the improvement. The company also reported a 28% year-over-year increase in average price per terabyte, accelerating from the high-teens growth recorded in the previous quarter. Non-GAAP operating margin rose to 49.1% from 30.4% in the year-ago quarter, highlighting its ability to sustain profitability improvements. WDC reported non-GAAP operating income of $2.15 billion, up 152% year over year, driven by strong revenue growth, higher gross margins and improved operating leverage. Non-GAAP operating expenses were $391 million, improving 130 bps sequentially, reflecting stronger operating leverage. As of Oct. 2, 2026, cash and cash equivalents were $1.3 billion compared with $1.6 billion reported as of Jul 3, 2026. WDC ended the quarter with $789 million of debt. Western Digital generated $1.6 billion in cash from operations compared with $672 million in the prior-year quarter. Free cash flow amounted to $1.4 billion in the quarter under review, up 130%. WDC returned $1.1 billion to shareholders through share buybacks and dividends, underscoring the sustainability of free cash flow generation and its commitment to creating long-term shareholder value. Western Digital expects its strong performance to continue in the second quarter of fiscal 2027, led by robust exabyte growth and improved pricing. At the midpoint of its guidance, the company expects revenue of $5.1 billion (+/- $100 million), representing a sequential increase of approximately 16% and a year-over-year rise of 69%. Management projects non-GAAP gross margin of 60-61%, fueled by a favorable shift toward higher-capacity drives and a strong pricing environment. Non-GAAP EPS is expected to reach $5.8 (+/- 20 cents). WDC expects operating expenses to be between $400 million and $410 million for the fiscal second quarter, reflecting a sequential increase due to higher spending on product qualification activities. Currently, Western Digital has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Valero Energy Corporation VLO reported third-quarter 2026 adjusted earnings of $23.90 per share, up 553% from $3.66 a year ago. Revenues climbed 43.3% year over year to $46.10 billion from $32.17 billion, beating the Zacks Consensus Estimate by 23.29%. The results benefited from substantially stronger refining margins and improved profitability across the Renewable Diesel and Ethanol segments. Refining throughput averaged 2.97 million barrels per day, down from 3.09 million barrels per day a year earlier. Quest Diagnostics Incorporated DGX reported third-quarter 2026 adjusted earnings of $3.00 per share, up 15.4% year over year. The figure beat the Zacks Consensus Estimate by 5.3%. Revenues rose 10% year over year to $3.10 billion, surpassing the Zacks Consensus Estimate by 1.7%. Growth was supported by strong testing demand across physician, hospital and consumer channels, with organic requisition volume increasing 14.4%. International Business Machines Corporation IBM reported strong third-quarter 2026 results, with adjusted earnings rising 11% year over year to $2.95 per share. The figure beat the Zacks Consensus Estimate of $2.88 by 2.4%. Revenues increased 4.7% to $17.10 billion, surpassing the consensus mark of $16.87 billion by 1.4%. Software revenues increased 8.2% year over year to $7.80 billion, up 8.7% at constant currency. Hybrid Cloud revenues grew 11%, supported by Red Hat, while Data jumped 20% at constant currency, benefiting from Confluent's performance. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Western Digital Corporation (WDC) : Free Stock Analysis Report International Business Machines Corporation (IBM) : Free Stock Analysis Report Quest Diagnostics Incorporated (DGX) : Free Stock Analysis Report Valero Energy Corporation (VLO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

- Valero Energy reported third quarter 2026 sales of US$46.1b and net income of US$6.8b, with earnings supported by stronger refining margins and profitable Renewable Diesel and Ethanol operations. - The St. Charles Refinery optimization project, completed on time and within budget, is expected to shift more output toward higher value products and deepen Valero Energy's low cost Gulf Coast refining advantage. - This article reviews how Valero Energy's investment narrative is being reshaped by the recent strength in refining and renewable fuel profitability. Capitalize on Valero Energy's refining momentum by scanning a curated group of fuel and energy plays with resilient margins through the 42 power grid technology and infrastructure stocks. To own Valero Energy, you need to believe that tight global refining capacity, access to discounted heavy crude and solid low carbon fuel economics can keep cash generation healthy even if industry conditions cool from current levels. The latest quarter points to robust profitability in refining, renewable diesel and ethanol, which supports that thesis in the near term. The main short term swing factor is refining and low carbon fuel margins. Strong third quarter earnings lean in favour of that catalyst, while key risks remain asset impairments on older sites, a reversal in renewable diesel profitability or higher unplanned maintenance costs that could squeeze unit economics and reduce cash available for shareholder distributions. The stand out recent disclosure is Valero Energy's third quarter 2026 report, with US$46.1b of sales, US$6.8b of net income and roughly US$23.9 of basic earnings per share from continuing operations. Those figures highlight how tight capacity and strong product pricing can flow through when the Gulf Coast system is running efficiently. For catalysts, that report underscores how sensitive the business is to refining spreads and renewable fuel credits. Strong operating income from refining, together with profitable Renewable Diesel and Ethanol segments, supports the idea that multiple earnings streams are contributing today. The flip side is clear: any sharp weakening in margins or low carbon credit values would test how durable that earnings base really is. Valero Energy's narrative projects US$116.1b revenue and US$7.0b earnings by 2029. That profile assumes revenue declines by 4.3% per year and an earnings decrease of US$0.2b from US$7.2b today. Uncover how Valero Energy's fair value indicates a 6% potential downside to its current price, which leaves little room for error. Some of the most optimistic analysts anchor their story for Valero Energy in higher long run refining utilization, not just today's tight capacity. Before this earnings beat, the bullish camp was pencilling in revenue of about US$142.9b and earnings near US$9.1b by 2029. Your takeaway is simple: opinions differ sharply, and this new quarter may push those forecasts in very different directions. Explore 3 other Valero Energy fair value estimates, including one that suggests potential upside of up to 78% from the current price. Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. - A great starting point for your Valero Energy research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision. - See our latest analysis for Valero Energy. The report includes a comprehensive fundamental analysis summarized in a single visual: the Snowflake, making it easy to evaluate Valero Energy's overall financial health at a glance. If the Valero Energy story has sharpened your thinking and you want to broaden your watchlist, the Simply Wall St Screener can help you scan for other companies that fit different risk and return profiles without having to build your own filters from scratch. - If you want potential upside with tighter downside checks, start with a group of 30 resilient stocks with low risk scores that score well on resilience and balance sheet quality. - For investors focusing on resilient income, there is a curated set of 6 dividend fortresses that combine elevated yields with an emphasis on durability. - If you are hunting for businesses the market may be overlooking, use the screener to surface 20 high quality undiscovered gems that pair solid fundamentals with lower visibility. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include VLO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

- Interested in Valero Energy Corporation? Here are five stocks we like better. - Valero's Q3 earnings surged: Net income rose to $6.8 billion, or $23.89 per share, from $1.1 billion a year earlier, driven primarily by strong refining conditions and near-record utilization. - All major operating segments improved: Refining operating income jumped to $8.8 billion, while renewable diesel swung to $353 million in profit and ethanol income increased to $272 million. - Strong cash generation supports shareholder returns: Valero generated $6.9 billion in operating cash flow, ended the quarter with $9.8 billion in cash and maintained a 52% shareholder payout ratio; management also reaffirmed its roughly $2 billion 2026 capital-investment plan and constructive fourth-quarter outlook. - Oil Above $100 Is Creating a New Opportunity Beyond the Major Producers Valero Energy (NYSE:VLO) reported sharply higher third-quarter 2026 earnings as strong refining conditions, high utilization rates and improved renewable diesel profitability lifted results across its operating segments. Net income attributable to Valero stockholders totaled $6.8 billion, or $23.89 per share, compared with $1.1 billion, or $3.53 per share, in the third quarter of 2025. Adjusted net income was also $6.8 billion, or $23.90 per share, according to Senior Vice President and Chief Financial Officer Homer Bhullar. → Aurora Rejects Curaleaf's Higher Bid, But the Takeover Fight Isn't Over - Large Caps Across Planes, Tech and Oil Announce Over $10 Billion in Buybacks Chairman, Chief Executive Officer and President Lane Riggs said the company's refining teams operated at near-record utilization levels amid market volatility and tight product inventories. Valero's ethanol segment also posted quarterly record production, he said. Valero's refining segment generated $8.8 billion in operating income during the quarter, compared with $1.6 billion a year earlier. Refinery throughput averaged 3 million barrels per day, while refining cash operating expenses were $5.03 per barrel. → Could Quantinuum's Breakthrough Make Its Sell-Off a Bargain? - Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? The company completed its $230 million fluid catalytic cracking unit optimization project at its St. Charles refinery during the quarter. Riggs said the project was completed on schedule and within budget and has increased output of higher-value products, including alkylate and gasoline. Chief Operating Officer Gary Simmons said the St. Charles project's third-quarter EBITDA contribution exceeded the financial assumptions used when Valero approved the investment, despite the unit not being fully operational for the entire quarter. He said benefits should be greater during the second and third quarters, when gasoline-related economics are typically stronger. → IonQ's Bold Expansion Could Leave Shareholders Paying the Price Valero's renewable diesel segment reported operating income of $353 million, compared with an operating loss of $28 million in the prior-year period. Renewable diesel sales volumes averaged 3.4 million gallons per day. The ethanol segment reported operating income of $272 million, up from $183 million a year earlier, with production averaging 4.8 million gallons per day. Eric Fisher, senior vice president of product supply, trading and wholesale, said Valero is pursuing smaller-scale capacity expansion projects at ethanol facilities and continuing carbon sequestration efforts at certain sites. He said the company expects those sequestration projects to come online between late 2027 and mid-2028. Net cash provided by operating activities was $6.9 billion in the third quarter. Excluding a $526 million unfavorable working-capital impact and $205 million related to the other joint-venture member's share of Diamond Green Diesel, adjusted operating cash flow was $7.3 billion. Capital investments attributable to Valero totaled $429 million during the quarter. The company maintained a shareholder cash-return payout ratio of 52% and repaid $526 million in notes that matured in July and September. Valero ended the quarter with $9.8 billion of cash and cash equivalents, $8.6 billion of total debt and $2.4 billion of finance lease obligations. Its debt-to-capitalization ratio, net of cash, was 4% as of Sept. 30. Bhullar said Valero's long-term cash target remains $4 billion to $5 billion, but the company is maintaining cash above that range to preserve flexibility in a volatile commodity-price environment. He said excess cash ultimately would be directed to shareholders over time, while the company continues to use disciplined investment standards. On shareholder returns, Bhullar said Valero views dividends and share repurchases as complementary. He described the dividend as a "permanent commitment" that the company seeks to grow at a ratable pace through cycles, with repurchases providing a more flexible component of total shareholder returns. Valero maintained its forecast for approximately $2 billion in 2026 capital investments attributable to the company. About $1.7 billion is expected to be devoted to sustaining activities, including turnarounds, catalysts, regulatory compliance and repairs at the Port Arthur refinery's distillate hydrotreater unit. The Port Arthur DHT repair remains on schedule for completion by year-end, with total costs still estimated at approximately $250 million. Valero said the refinery continues to operate at normal throughput rates and expects a substantial portion of repair costs to be covered by insurance. For the fourth quarter, Valero expects refining throughput in the following ranges: - Gulf Coast: 1.855 million to 1.905 million barrels per day - Mid-Continent: 440,000 to 460,000 barrels per day - West Coast: 100,000 to 110,000 barrels per day - North Atlantic: 480,000 to 500,000 barrels per day The company expects refining cash operating expenses of approximately $4.85 per barrel. Renewable diesel sales are projected at roughly 325 million gallons, while ethanol production is expected to average 4.9 million gallons per day. Management said U.S. Gulf Coast refiners remain advantaged by access to domestic crude supply, cost-competitive feedstocks and the ability to process a variety of crude grades. Randy Hawkins, vice president of international crude oil supply and trading, said higher global freight rates have widened discounts for crude that must compete for export markets, including heavy sour barrels. Hawkins said the cost of moving a very large crude carrier from the Gulf Coast to Asia had recently averaged about $30 to $35 per barrel, compared with an average of roughly $5 per barrel in 2025. He said Valero's Gulf Coast system benefits from access to a broad slate of crude grades and has a freight advantage for certain Latin American heavy barrels relative to Asian alternatives. Simmons said Valero has not seen meaningful demand destruction in its wholesale markets. U.S. wholesale gasoline sales on a seven-day average basis were up 4% from a year earlier, while distillate sales were up about 2%, he said. Export demand for gasoline and diesel from the Gulf Coast also remained strong, according to management. Valero said it continues to evaluate growth opportunities centered on feedstock flexibility, heavier sour crude processing, refinery optimization and ethanol. Riggs said the company remains interested in potential acquisitions in regions where it already has operational and commercial advantages, but would maintain its established return thresholds and capital-allocation discipline. Valero Energy Corporation is an international energy company headquartered in San Antonio, Texas. The company's primary business is refining and marketing transportation fuels, including gasoline, diesel, jet fuel and other products used by commercial, industrial and consumer customers. Valero operates refineries in the United States, Canada and the United Kingdom. Its refining operations also produce asphalt, petrochemical feedstocks and other petroleum-based products. The company markets fuel through wholesale channels and branded retail networks, including Valero, Beacon and Shamrock-branded locations. In addition to conventional refining, Valero has businesses focused on renewable fuels. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Valero Energy Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Image source: The Motley Fool. Thursday, Oct. 22, 2026 - VP of Investor Relations - Brian Donovan - Chairman, CEO and President - Lane Riggs - Executive Vice President and COO - Gary Simmons - Executive Vice President and general counsel - Richard Joe Walsh - Senior Vice President and CFO - Harminder Bhullar - Unidentified Speaker - Randy Hawkins - Unidentified Speaker - Eric Honeyman Operator: Greetings, and welcome to Valero Energy Corp. Third Quarter 26 Earnings Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Donovan, VP of Investor Relations. Please go ahead. Brian Donovan: Good morning, and welcome to Valero Energy Corporation's Third Quarter 26 Earnings Conference Call. Today, I am joined by Lane Riggs, Chairman, CEO and President Gary Simmons, Executive Vice President and COO Richard Joe Walsh, Executive Vice President and general counsel Harminder Bhullar, Senior Vice President, and CFO and several other members of Valero's senior management team. If you have not yet received a copy of our earnings release, it can be found on our website at investorvalero.com. Included with the release are supplemental tables providing detailed financial information for each of our business segments, along with reconciliations and disclosures for any adjusted financial metrics during today's call. If you have any questions after reviewing these materials, please feel free to reach out to our investor relations team. Before we begin, I would like to draw your attention to the forward looking statement disclaimer included in the press release. In summary, it says that statements made in the press release during this conference call that express the company's or management's expectations or forecasts of future events are forward looking statements. And are intended to be covered by the safe harbor provisions under federal securities laws. Actual results may differ from those expressed or implied due to various factors, which are outlined in our earnings release and filings with the SEC. I will now turn the call over to Lane for opening remarks. R. Lane Riggs: Thank you, Brian, and good morning, everyone. During the third quarter, business teams executed well in all reporting segments. The market volatility and tight product inventories we saw in the prior quarter continued through the third quarter. Our teams remain focused on execution in running our refineries at near record levels of utilization and helping keep the market supplied with critical transportation fuels. Our ethanol segment also achieved a quarterly record for production during the third quarter, supplying fuel and contributing to our overall performance. Financially, we remain in a strong position. During the quarter, we continued to honor our longstanding shareholder commitments while also strengthening our cash position. As we look ahead, we remain constructive on the long term outlook for our business. Refining fundamentals remain favorable supported by low product inventories, limited excess refining capacity, and continued demand for transportation fuels. Compared to other regions around the world, United States is well positioned in the current market environment. and the U. S. Gulf Coast continues to be 1 of the most advantaged regions globally supported by abundant domestic crude production and access to cost competitive feedstocks. Combined with our strategically located refining system, and the flexibility of our commercial team, these advantages support our ability to respond to changing market conditions, and support resilient customer demand. Turning to strategic capital projects, we completed the FCC unit optimization project at St. Charles Refinery during the third quarter on schedule and within budget. This $230 million investment has already increased production of higher valued products, including alkylate and gasoline. We continue to evaluate additional strategic opportunities to further strengthen the competitiveness and long term value of our refining system. However, as we assess these opportunities, we remain committed to our disciplined investment process that has served us well for more than a decade. In closing, our third quarter performance underscores the quality of our assets and our consistent operational commercial and financial performance. This is a result of a long term strategy that we have been committed to for well over a decade. With that, I will turn the call over to Harminder. Harminder S. Bhullar: Thank you, Lane. For the third quarter of 26, net income attributable to Valero stockholders was $6.8 billion or $23.89 per share, compared to $1.1 billion or $3.53 per share for the third quarter of 25. Excluding the adjustments shown in the earnings release tables, adjusted net income attributable to Valero stockholders for the third quarter of 26 was $6.8 billion or $23.90 per share, compared to $1.1 billion or $3.66 per share for the third quarter of 25. The Refining segment reported operating income of $8.8 billion for the third quarter of 26 compared to $1.6 billion for the third quarter of 25. Refining throughput volumes in the third quarter of 26 averaged 3 million barrels per day. Refining cash operating expenses were $5.3 per barrel in the third quarter of 26. The Renewable Diesel segment reported operating income of $353 million for the third quarter of 26 compared to an operating loss of $28 million for the third quarter of 25. Renewable diesel segment sales volumes averaged 3.4 million gallons per day in the third quarter of 26. The Ethanol segment reported operating income of $272 million for the quarter of 26 compared to $183 million for the third quarter of 25. Ethanol production volumes averaged 4.8 million gallons per day in the third quarter of 26. G&A expenses were $308 million for the third quarter of 26, Depreciation and amortization expense was $684 million for the third quarter of 26. Net interest expense was $144 million and income tax expense was $2.1 billion for the third quarter of 26. The effective tax rate was 23%. Net cash provided by operating activities was $6.9 billion for the third quarter of 26, Included in this amount was a $526 million unfavorable impact from working capital and $205 million of adjusted net cash provided by operating activities associated with the other joint venture membership share of DGD. Excluding these items, adjusted net cash provided by operating activities was $7.3 billion in the third quarter of 26. Regarding investing activities, we made $432 million of capital investments in the third quarter of 26 of which $371 million was for sustaining the business, including cost for turnarounds, catalysts and regulatory compliance, and the balance was for growing the business. Excluding capital investments attributable to the other venture member share of DGD and other variable interest entities, capital investments attributable to Valero were $429 million in the third quarter of 26. Moving to financing activities, we remain committed to our disciplined capital allocation framework. Shareholder cash returns resulted in a payout ratio of 52% for the quarter. Also in the third quarter, we repaid the outstanding principal balances of our $100 million note that matured in July and our $426 million note that matured in September. An additional $146 million of debt maturing later this year will be repaid using proceeds from the debt we proactively issued in the first quarter during a lower rate environment. Turning to the balance sheet, we ended the quarter with $8.6 billion of total debt $2.4 billion of total finance lease obligations and $9.8 billion of cash and cash equivalents. The debt to capitalization ratio net of cash and cash equivalents was 4% as of 9/30/2026, reflecting the cash build this year. While our long term $4 billion to $5 billion cash target remains unchanged, continue to maintain cash above the high end of that range to preserve optionality in a volatile market environment consistent with our messaging throughout this year while also honoring our payout commitment. Overall, we ended the quarter well capitalized with $5.3 billion of additional liquidity excluding cash. Turning to guidance, we still expect capital investments to attributable to Valero for 2026 to be approximately $2 billion. This includes expenditures for turnarounds, catalysts, regulatory compliance, joint venture investments and the estimated cost to repair the DHT unit at our Port Arthur refinery. Approximately $1.7 billion is allocated to sustaining the business with the remainder directed toward growth projects. Repairs to the Port Arthur DHT unit remain on track for completion by year end. Total repair costs are still estimated to be approximately $250 million which are included in our sustaining capital guidance. As previously guided, we expect a substantial portion of the cost to be covered by insurance. In the meantime, the refinery continues to operate at normal throughput rates. Our growth projects continue to be focused on shorter cycle opportunities that improve crude and product flexibility optimize the value of our product mix and maximize utilization of existing conversion capacity across our refining operations. We have also been pursuing efficiency and capacity expansion projects at our ethanol plants. These investments should enhance the earnings power of our assets. For modeling our fourth quarter operations, we expect refining throughput volumes to fall within the following ranges: Gulf Coast at 1.855 to 1.91 million barrels per day Mid Continent at 440 thousand to 460 thousand barrels per day, West Coast at 100 to 110 thousand barrels per day, and North Atlantic at 480 thousand to 500 thousand barrels per day. We expect refining cash operating expenses in the fourth quarter to be $4.85 per barrel. For the renewable diesel segment, we expect sales volumes of approximately 25 million gallons in the fourth quarter. Operating expenses should be 53 cents per gallon, including 23 cents per gallon for non cash costs such as depreciation and amortization. Our ethanol segment is expected to produce 4.9 million gallons per day in the fourth quarter. Operating expenses should average 38 cents per gallon, which includes 4 cents per gallon for non cash costs such as depreciation and amortization. For the fourth quarter, net interest expense should be about $135 million and total depreciation and amortization expense should be approximately $700 million Lastly, G&A expenses for 2026 are expected to be approximately $1.1 billion Thanks, Harminder. Brian Donovan: That concludes our opening remarks. Before we open the call to questions, I would ask that you limit each turn in the Q&A to 2 questions. If you have more than 2 questions, please rejoin the queue as time permits to ensure other callers have time to ask their questions. Thank you. Operator: Ladies and gentlemen, the floor is now open for questions. Our first question is coming from Sam Margolin of Wells Fargo. Please go ahead. Sam Margolin: Question on industry fundamentals. If we could start out and on crude differentials, which have been pretty topical and also outsized recently. I think some of the crude differential move has been attributed to freight, but if you could just talk about it for a minute and give your views on whether it is structural what is happening with crude differentials because there is more heavy supply coming or if you think this is more of a cyclical condition related to some constraints and external factors. Randy Hawkins: Hi, Sam. Good morning. This is Randy. Obviously, the market remains a extremely volatile. We just get headlines every day, every night. around events in the Middle East, and we are obviously keeping a close eye on that on global trade flows. Over the last several weeks, it does look like we are seeing sustained higher flows moving through the straits. We have seen media sources over the last couple days indicating that the volume over the last week has been actually higher than prewar levels. In addition to that, we have had some recent, SPR releases. So, overall, our indications from what we see in the market both on spreads and trades flow, looks like the market is pretty well supplied with oil. And as you mentioned, the main story right now in the market is freight rates. As the flow through the straits increase, you know, the inefficient process of the ship to ship transferring they are doing of crude oil in the Gulf of Oman, is really tying up global shipping to require more tankers to move the same amount of oil. You know, this is in addition to, you know, insurance risk premiums, transshipment delays, higher bunker costs. They are all just kind of driving freight higher. As an example, this extreme run up in freight, I mean, the cost to move a VLCC from the Gulf Coast to Asia is now averaging around 30 to $35 per barrel. That compares with the 2025 average of around $5 a barrel. We are seeing this freight increase kind of play out in all markets around the globe and across all shipping classes. Mainly on the dirty freight side. And this is causing severe dislocations in our global crude pricing as refiners seek to find barrels that are closer to home and sellers are forced to discount barrels to account for the freight cost. You know, fortunately for us, the bulk of our systems in The Gulf Coast which has access to a wide range of crude and crude qualities. is now a large exporter of crude. Since this crude must price to export, the sharp run up in freight costs have forced the discounts to widen all grades giving the US Gulf Coast some of the cheapest crude costs in the world, especially on the heavy sour. And the Gulf Coast is also a freight advantage for heavy barrels out of Latin America with a Brent alternative. And discounts for these foreign barrels are also having to compensate for the large freight increase. As Lane mentioned before, the Gulf Coast remains 1 of the most advantaged crude markets globally, and this freight run up only further supports that. You know, looking ahead, our long term outlook on crude differentials remains very constructive as incremental supply looks to be dominated by heavier and more sour barrels especially out of Canada, Venezuela, The Middle East, which further supports the value of our Gulf Coast system. Sam Margolin: Okay. Thanks. Yeah. I mean, I was gonna ask a follow-up on freight. It sounds like you characterized your position fairly completely there. And so, maybe this follow-up is just for Harminder And on the cash balance, you know, you are carrying a lot of cash. it is an interesting position because you have a lot of optionality. I mean, even if you are just earning a treasury rate on the cash, it is a massive number at this point. And so just your thoughts on how the balance sheet is structured today, whether you know, it is a point in time that is not necessarily meaningful over the long term or if you kind of like having this optionality with an outsized cash position? Structurally. Thanks. Harminder S. Bhullar: Yeah. Hey, Sam. I guess, let me just start by kind of reiterating what we have said all throughout this year that our initial decision to, you know, start building cash earlier this year was really around you know, prudently managing volatility in commodities prices. Right? The risk that we have talked about is when you have a rapid pullback in commodity prices, it is generally accompanied by a draw on working capital and a draw on cash. And so you know, in that event, you wanna make sure. Mike, we wanted to make sure that we are not on our ability to return cash to shareholders even if there is a significant draw on cash. In fact, I would say we wanna make sure we are in a great to lean into shareholder returns in that event. So, in an environment that remains pretty constructive, we are comfortable where we are with respect to a payout. We continue to pay out above 50%. And continue to build cash. You know, you touched on it, but we do not have a lot of other kind of commitments to cash. We do not have a lot of maturities over the next year plus. We have a little under $150 million that matures later this year. And a little over $500 million next year. So we have plenty of flex flexibility as you highlighted. Obviously, we have talked about this before, but we are not gonna change our approach to capital investments just because we have a lot of cash. So in short, we do not have a lot of other uses of cash. So while the volatility is probably not behind us at this point, we are in a good position to be even more aggressive with shareholder returns especially if volatility returns as we ultimately move back towards our long term cash target balance of $4 to $5 billion. In any event, I think whether margins and cash flow profile of our business remains strong or not, our long term targets on cash have really not changed. So over time, all the excess cash we are accumulating will ultimately be directed towards our owners. Thank you. Operator: Thank you. Our next question is coming from Manav Gupta of UBS. Please go ahead. Manav Gupta: Good morning. I actually just wanted to follow-up a little U. S. Margins look very good, but what we are hearing is when you take into account some of your freight cost back backwardation, some of your Brent or European peers, they are not doing as well And, again, you are also the low cost refiner in the world. So I am just trying to understand, are we seeing a bifurcated scenario where 1 region of the world is at a good margin and can run much harder versus other parts of the world, which are struggling to source crude. And even when it gets there, it is very expensive. So can you talk a little about those dynamics, please? Gary K. Simmons: Yeah. Manav, this is Gary. I think we see the exact same thing you are staring at, which gives us high confidence that this current crack spread environment is very sustainable. When you look at some of the low complex refining capacity in the Far East, freight cost to get crude to that refiner, and freight cost to get back into the export markets. It looks like their margins are in the $2 to $3 a barrel range. You know, in addition to the margin squeeze they are currently facing, we are also seeing natural gas prices begin to take off in those regions, which puts even a higher floor on where crack spreads need to go in order to force those refineries to continue to run at high utilization rates. And I think the world needs that capacity to be running today. Thank you. Manav Gupta: And my quick follow-up here is have you seen any signs of any kind of demand destruction Or can you generally talk about what you are seeing in the both US demand as well as export demand as Valero sees it out there? Thank you. Gary K. Simmons: Yes, Manav, I will go through some of what we are seeing on the wholesale side. For the most part, I would say we are not seeing any signs of demand destruction at all. On the gasoline side, our US wholesale network, 7 day average sales are actually up 4% year over year. In Canada, they are flat year over year. In The UK, flat year over year. Second quarter call, I mentioned that we were seeing some demand destruction in The UK. But actually, in the third quarter, demand recovered nicely there. So gasoline demand has been very resilient to the higher prices. And then the export demand also very, very strong. You could see in all of our export markets, we are seeing a good pull from The US Gulf Coast. Certainly, we have seen gasoline cracks come off a little bit. Some of that is just seasonal as you have transitioned out of driving season. And also get the swell from higher butane blending with the winter grade gasoline specs. But the underlying gasoline fundamental looks very, very strong. We do not have a Transatlantic arb to ship gasoline from Northwest Europe. Into pad 1. We really do not have storage economics to begin to make summer grade gasoline in store it, you know, which is very constructive to the spring. I think the biggest thing, you know, when I look at the gasoline market, here we are in October out of driving season. Into high RVP gasoline season, and you still have backwardation in the gasoline market. Which is really telling you that the prompt market is very tight for gasoline supply. And I think all of that is very constructive to gasoline longer term. On the distillate side, similar trends. Our wholesale network would indicate about 2% year over year growth in sales 7 day average sales. Both the UK system and Canadian system are showing flat year over year sales. The only area where we are actually seeing lower sales is home heating oil in The UK. It is off about 10%. When you visit with our commercial teams over there, they think that is a combination of a couple of reasons. 1, you have had unseasonably warm weather. And 2, you have also had customers that are really trying to delay filling their tanks as long as they can. So what that actually could tell you is you could see a surge in demand in The UK when you actually get cold weather. Export demand for diesel also very, very strong. Both the Latin America and Europe. So for us, no indication of demand destruction. And in fact, some of the leading indicators, you know, both GDP remaining flat and also a lot of the trucking surveys actually picking up. You know, which would tell you the diesel demand is hanging in there very nicely. Thank you so much. Operator: Thank you. The next question is coming from Neil Mehta of Goldman Sachs. Please go ahead. Neil Mehta: Yes. Thanks, guys. And maybe the first question is just on volumes. The volume guide you provided for 4Q probably a little higher than what we thought. And so just maybe you could talk about you are running the system hard in the fourth quarter. I guess the DHP is back up too. So that should be a help as you go into the fourth quarter. And then maybe stepping back for the industry broadly, we did run so hard in 2026, you think 2027 is gonna be a decent sized turnaround year for the industry? Any thoughts around that? Gary K. Simmons: Yes, Neil. So I will start with the DHT. We really do not expect to have a mechanical completion of the DHT until the end of the quarter. So it will not have a the DHT will not really is not in the guidance. We are. You know, it is a light maintenance quarter for us, and so we will run the assets hard. With margins where they are. In terms of the rest of the industry and deferring of turnarounds, you know, we have been public. We do not really defer any of our maintenance. We will continue on our schedule for turnarounds. What you do hear from consultants is that was that about a million and a half barrels a day of refinery turnarounds globally. That was deferred, which means, you know, turnaround activity is currently a little lighter than normal, and you would expect a heavier turnaround season next year. Neil Mehta: that is helpful. And then, just in terms of Q4 considerations, maybe this is for you Harminder or Gary, but just we have averaged the charts a quarter, the Gulf Coast indicator is up the mid indicator is up as well. And just any thoughts as we think about the fourth quarter seasonally, things tick down. But we start off the quarter pretty strong. Any advice for us as we model out the fourth quarter? Gary K. Simmons: Yes. So I think the big tailwinds for the fourth quarter, typically, you get the uplift of blending butane into gasoline. In our North Atlantic system, you generally have a nice uplift after we start to make Arctic diesel that carries some premium there. Seeing some good tailwinds on the feedstock side with the heavy sours discounted and a lot of feedstock optimization opportunities. And then we are starting to see jet regrades turn positive again, which is also a tailwind. Outside of that, you know, when you look at secondary products, it is kind of a of a mix. Propylene and naphtha are off a little bit, but aromatics are up. So overall, I would say mainly tailwinds when it comes to capture rates for the fourth quarter. Thanks, Kier. Operator: Thank you. The next question is coming from Theresa Chen of Barclays. Please go ahead. Theresa Chen: Good morning. Gary, as we look at the very recent volatility in cracks, keeping in mind your comments about demand resiliency across your footprint plus the floor being incrementally higher for international refiners given high freight costs, natural gas and so on. How would you explain the recent downside volatility? Is that a result of incremental crude and products finding its way through the straight? What explains this and how do you expect these factors to evolve over the near and medium term? Gary K. Simmons: Yes. It looks like some of the downward pressure on cracks is really related to more headlines. People announcing releases from strategic reserves, lifting of Russian sanctions, some of those type things is what is actually driving some of the downward pressure on cracks. I think when you digest the data and you look at how much volume is actually coming out, and then lifting of sanctions is more just a change in trade flows. Think we will see a recovery in cracks moving forward. Theresa Chen: Got it. And we have seen various headlines about the Trump administration potentially working with operators to reopen US refining capacity that is been idled in the last 10 years. How seriously should we take these efforts? And more broadly, how do you think the supply shortage of the market would be most effectively addressed? Richard Joe Walsh: This is Richard Joe Walsh. I will try to answer that 1. I really think you are focusing in here on Benicia. And so I have just remind you that the status of that refinery is it is safely idle and has been since April. And we have no plans to restart it. You know, we. When we first announced and you know, and even just before we announced the shutdown of that facility, we had lots of discussions with both the state and the federal government and private parties. And, you know, none of those efforts actually materialized anything. You know, it is just--it is a tough environment to operate in the West Coast, and we just do not see the potential for that. So and the last thing I would just remind you is that, you know, to restart that refinery, you know, you would have to, reinventory it. You would have to restaff it. You would have to undertake a rather extensive turnaround. You know? So it is not it is not a simple process, to restart it. R. Lane Riggs: So Hey, Theresa. This is Lane. I will add to that. I think, you know, what you are thinking broadly. More broadly speaking, you know, almost any refinery that is been shut down will take a while to start up. It would It would be very difficult for them to help the prompt situation. We have not had a lot of inbound from the administration with respect to starting up other refineries. But I. You know, we have heard the same things you guys have. So I am not saying that is not occurring, but I think in the idea that it is going to. You know, the there is these refineries that you can just sort of walk in and put the lights on and they are going to start running is not exactly the case. But, you know, we will just see what is happening with respect to on a longer term basis with how this all plays out. Operator: Thank you. Thank you. The next question is coming from Philip Jungwirth of BMO Capital Markets. Please ahead. Phillip Jungwirth: Inter quarter, we saw a lot of Venezuela upstream investment plans announced and some pretty ambitious production growth targets. That. So just wondering where you are now on Venezuela throughput versus capacity and just what would it take to have enough confidence to invest in increasing the ability to run more heavy crude? Randy Hawkins: Yes. Philip, this is Randy. We continue to see pretty good availability of Venezuelan crude in the Gulf Coast system. And as you mentioned, we are pretty encouraged by some of the new investments that is going on in there to grow production moving forward. You know, we have been for a long time, and we continue to be the largest consumer of Venezuelan crude. And in The US Gulf Coast, we are we are the largest by far. In fact, in the third quarter, we saw the Venezuelan crude compete very favorably compared to other heavy sour alternatives. As a result, we set a new processing record for Venezuelan barrels in the Valero system during the quarter. R. Lane Riggs: As we moved into the fourth quarter, we have seen the economics shift some. The higher freight market has especially impacted the heavy crude market. We have seen discounts for Canadian crude in the Gulf Coast widened to as high as 27 to $30 under Brent. Making the Canadian barrel much more competitive versus the Latin barrel. You know, as we kinda touched on before, our system's very flexible. So our ability to flex between different grade is a big competitive advantage. And as we move forward, we are going to continue to look at opportunities where we can further increase consumption of those barrels. Yeah. This is Lane. I will add to that. I mean, definitely 1 of the buckets that we look at in terms of our projects or even acquisitions with respect to with respect to this sort of heavy sour position. We feel pretty. We feel like this an area to help us with our feedstock optimization, and we are looking for debottlenecking opportunities and other opportunities. And that is space. So increase our exposure to be able to run heavy sour. Phillip Jungwirth: Okay, great. And then can you hit on the outlook for DGD margins and some of the just the noise in 3Q, 2Q around capture, anything 1-off to keep in mind there? And how you see that metric trending into the fourth quarter? Eric Honeyman: Yes, Philip, this is Eric. I think just as a quick refresher, 2Q had a lot of 1-off, 1-time benefits like IEPA recovery as well as a lot of modeling updates and year to date true ups. And so you had kind of an unusually high second quarter because some of the onetime benefits. Also had the benefit, and we have talked about this on previous calls, there is there is a lag on how feedstocks price when they when they come into DGD. And you combine that with the volatility that we are all seeing it creates a lot of noise in margin capture. So if you look at 2Q, you had feedstocks that we had bought in 1Q that were still much cheaper than the margin indicator. So you had that advantage, and then you had, if you recall, a lot of the comments about the conflict were kind of waning And so as ULSD fell, even though that is the base commodity price for DGD, it did help with some of the volatility in the positions of how carbon was specifically pricing in that quarter. 3Q, you had the exact opposite. We had the impact that, obviously, we had the outage. We had the storm in DG 3, which forced us to run a higher percentage of foreign feedstocks that were on the water. So, you know, foreign feedstocks do not capture PTC, so we had a lower PTC capture than the margin indicator. And then you also had a lot of noise around the D4. And so with the conversation about SREs and whether or not they are gonna be reallocated, we saw a pretty significant drop in the D4. And as those product--as those product cargoes were pricing, we had we saw a lot of volatility impact hit that lag as well. So it is it is really all tied up in lag and the volatility of both ULSD and the D4. If I think about 4Q, I mean, you still have a structured high D4 RIN. So we continue to see DGD very positive from a margin standpoint. We see positive cash flow. And I think the real strength of like the refining segment where Gulf Coast is the most advantaged from a feedstock availability standpoint. Combined with Darling being the largest producer of domestic feedstock PTC benefits domestic feedstock. So we are pivoting into, as always, maximizing the feedstock from Darling, now maximizing vegetable oil runs, really going into this D4 short that is going to continue into 27. Operator: So captures a very difficult thing to. The next question is coming from John Royall of Piper Sandler. Please go ahead. John Royall: Hi, good morning. Thanks for taking my question. So my first question is a follow-up on the demand side. And I think you have mentioned that it is been relatively stable, despite significantly higher prices on both gasoline and diesel. I was wondering if you guys are in this market every day. Are you surprised we have not seen more demand response? And maybe do you have a view on if there is a price level where maybe we would start to see a little more elasticity? Gary K. Simmons: Yeah. So I would say, especially with all the headlines about pricing, we have been surprised that you do not really see any demand response so far. In terms of, you know, price level where you would expect some kind of demand destruction, I do not really know where that is because most people would have predicted we would have already seen it. Fair enough. Thank you. John Royall: And then I guess, Palmer mentioned in his opener that you might be looking at some capacity growth in ethanol. I was hoping you could dig in a little on that in terms of timing and magnitude and any other color you could give there. Eric Honeyman: Sure. This is Eric. With the new PTC or benefits with the 45 z, it is encouraging really all ethanol producers to take a look at higher volumes. And so we are looking at mostly capacity creep, So it is not--I mean, on a refinery scale, this is not significant capital. And it is very quick hitting capital. But, you know, it is small capacity creep. Continuing to pursue our carbon sequestration projects. At a couple of our sites. We are hoping, you know, those are hitting somewhere between late 27 to mid 28. All of that will grow both ethanol volume as well as lower ethanol CI. Which makes it more attractive for exports. So we continue to see pretty strong export demand for ethanol and our capacity is all pointed at growing exports. Thank you. Operator: Thank you. The next question is coming from Matthew Blair of Tudor, Pickering, Holt. Please go ahead. Matthew Blair: Hey, good morning. Thanks the question. On the freight rates, you mentioned the benefits on the crude side. In your Gulf Coast system. We have 2 follow ups here. So 1, are these higher freight rates a headwind to your North Atlantic and West Coast refineries? Or are you able to use, like, substitute crudes And then 2, what kind of impact are the freight rates having on your netbacks for your Gulf Coast products? Exports? Is it Is the rate just passed through or is it pulling down the economics for S. Product exports? Gary K. Simmons: Yes, this is Gary. For the most part, the higher freight rates actually give us an advantage into the typical export markets in the Latin America. You are largely competing with European barrels into those markets and so we have a freight advantage there. The only place that it does tend to hurt us is the exports, the diesel exports going to Europe. And I would tell you what it what it causes is just a lot of volatility with the arb going open and closed. Basically, Europe is short diesel and needs it. And so when the freight rates spike, their prices have to adjust to keep those arms open and keep the barrels flowing. Randy Hawkins: Yes. On the crude side, this is Randy. We do have some exposure to higher freight at our Pembroke refinery into the West Coast. And to a smaller extent into Quebec City even though that refinery is mostly supplied via pipeline. However, the, you know, the benefit of the Gulf Coast impact far outweighs that. In addition, we do have a large fleet of time charter vessels, which tends to buffer some of the impact of the higher spot freight rates. Matthew Blair: Greg. Thank you. And then do you have any insights on the refining situation in Russia? Do you have any estimates on how much capacity is down? How long it might take to bring that capacity up? And then what are you thinking on potentially Russia diesel exports picking up here? Thank you. Gary K. Simmons: Yes, this is Gary. I think that the data we see shows that on a 3 month average basis, compared to a 2024 equivalent period of time, there was about 1.4 million barrels a day of refining capacity offline in Russia. So still significant. Most consultants estimate that it will take quite a long time to get that capacity back. I cannot really give you a duration. On the diesel exports, I think if you look at the volume that was announced, it kind of puts it at July levels Of where Russian diesel exports would be, which is still 2.7 million barrels a day below where Russia was. Last year at this time. So it is not a significant volume. And as we have always stated, really, the sanctions or lifting of sanctions just result in change of trade flows, not really incremental supply coming onto or off of the market. Thank you. Operator: Thank you. Our next question is coming from Joe Lacch of Morgan Stanley. Please go ahead. Joe Lache: Greg. Good morning, Tim and thanks for taking my questions. So I wanted to just ask on St. Charles. So following the completion of the FCC work during the third quarter, could you just talk about how that unit is performing relative to expectations? And then maybe what kind of improvement should we expect in product yields or capture rates as we moved into the fourth quarter and beyond? And then maybe more broadly beyond St. Charles, can you talk about where you are seeing the greatest signals in opportunities to deploy future growth CapEx? Gary K. Simmons: Sure. I will start with the Saint Charles project. Yeah. The project came online, and despite the fact that it was not fully operational, during the third quarter, The EBITDA generated in the third quarter actually exceeded our forecast for the project. So it is performing very well. As Lane mentioned, you know, a lot of the project is really fully utilize the alkylation capacity that we have there. And so, typically, you would see the greatest benefit from that during gasoline season, so we would expect more of a benefit in second and third quarter than what you would see in the fourth quarter and first quarter. R. Lane Riggs: Yes. And I will add to it. This is Lane. I mean, in terms of projects that we like, it really is feedstock flexibility. If you think pre, I am going to say, Ukraine invasion, a lot of the a lot of the shore up to the barrel that require to fill out US refining capacity with VGO and other intermediates coming from that part of the world. And so consequently, as we went through the summer, even though we had wide margins over time when you had to go out and buy spot in VGO, your actually FCC margins were low. So 1 of the buckets that we see opportunity in is to be a little more--make our system a little more resilient if the not be quite so dependent on the VGO out there to find ways to increase VGO production. I said earlier, I. You know, we are optimistic about Venezuela and the Canadian sort of build out for heavy sour. We will look at ways to debottleneck our sort of our heavy sour capability. Joe Lache: Greg. Thank you. that is helpful. And then just given the significant cash generation that we have seen and excess cash building on the balance sheet, can you just talk about how you are thinking about potential M&A opportunities here across refining, renewable fuels and ethanol? R. Lane Riggs: I will start. We always look at like every earnings call, we look at everything that comes on the market. We in particular like our Gulf Coast system. We been unapologetic about that. We think it has the most add the most value when we can actually optimize in our system. So we continue to look for opportunities in that, in terms of and we also like the ethanol business. We will continue to look at the ethanol business But again, we are going to be very, very we are going to adhere to our disciplined approach to capital. You are not gonna see even though we are sitting on a lot of cash, we are not gonna change our approach in terms of our hurdle rates and our return metrics and how we think about capital allocation framework that we use, that we have been using for the last 10 years. That all makes sense. Thank you very much. Operator: Thank you. Our next question is coming from Doug Leggate of Wolfe Research. Please go ahead. Doug Leggate: Hey. Good morning, guys. Hopefully, you can hear me okay. Yep. Hey, guys. I got a couple of questions on reliability and the elevated refinery runs you guys have been able to deliver. Not just for Valero, but I guess for the industry. Clearly, maximizing exposure to the current environment is you know, is your I guess, you are you are showing the market leading by example. What does this mean for the maintenance cycle, the reliability of your system, and more importantly, the reliability of the industry's capacity to run at these elevated levels. Do you see any risk of unplanned downtime, I guess, as we think about 2027 going forward? I know it is a generic question, but I am just curious on your views. Gary K. Simmons: Yeah. So as I mentioned, you know, we have really changed anything in terms of our philosophy on maintenance and taking our turnaround. They are going as planned. And so I do not think you would expect to see anything different in terms of our reliability. If you do, you know, believe the consultant data that says, you know, a million and a half barrels of refinery turnarounds were deferred. It does lead you to believe that you know, there could be some unri. Reliability there and a and a heavier maintenance season next year. Doug Leggate: I, I guess we are we are hear. We are hearing a couple of, worries emerging from Europe in particular, which is why I asked question, but I appreciate your perspective. I guess my follow-up is we have obviously got massive reset in market expectations of mid cycle. I am curious if you can offer any thoughts on how this might impact your view on how you return cash to investors. I am thinking specifically about if we really are in a higher mid cycle environment, how would your dividend policy shift relative to, let's say, your share buyback policy? And I will leave it there. Thanks. Harminder S. Bhullar: Hey, Doug, it is Harminder. I mean, I think we look at both the dividend and share repurchases as a component of our total shareholder return. We do have a higher mid cycle view for all the reasons that, you know, Gary, Randy and Lane mentioned. But we still operate in a cyclical industry. You are asking about dividend. Think I will add, like, in theory, a higher mid cycle increases your debt capacity too, but we are not obviously levering up. Much like our balance sheet, we wanna make sure our dividend is durable both in good times and bads. And the dividend is obviously a permanent commitment we have made, which we will use and have used the balance sheet to defend as we did during the pandemic. That was not too long ago where our ability and willingness to pay dividend was challenged. So the dividend is a 1 way ratchet. We wanna make sure we have some ratable element to dividend growth through cycle. And then also, we look at dividend yield in the context of our closest peers, and we are kinda right in between both. So with all this in mind, we are gonna be more ratable on dividend growth, but, obviously, ensuring a predictable and attractive total return is a key aspect of our value proposition to our owners, and continue to round out that total payout with share repurchases as a more efficient and flexible means of delivering on that promise over the long term. Very clear. Thanks, guys. I appreciate it. Yeah. Thank you. Operator: Our next question is coming from Jason Gabelman of TD Cowen. Please go ahead. Jason Gabelman: Yes. Hey, just wanted to go back and revisit the demand destruction discussion for a second because we have seen diesel prices in New York Harbor having a tough time really sustain over $5 a gallon or around $200 a barrel as crude continues to trend higher. So it does seem like maybe at that level, is some destruction or for whatever reason, it is difficult diesel prices to move higher. And so as crude moves higher, is a potential for some compression in the diesel margin. Is that a risk you see going forward relative to where cracks are right now on the diesel side? Gary K. Simmons: Yeah. I think that is a fair characterization. You know, we have always felt like 1 of the things that is benefited refiners during this conflict is the fact that crude really has not gotten very you know, as expensive as it is to what it could have gone. And so if for some reason crude runs up, you know, I do think that, you know, it could cause some compression of refinery cracks. Jason Gabelman: Yeah. Thanks. My follow-up is just quickly on the M and A comment. You obviously mentioned you would want to grow in the Gulf Coast an asset became available, which makes sense. But, you know, the North Atlantic, Quebec market, there is a couple of private assets up there, those refining margins have been strong. there is probably some synergies within the business. Is that another region you would look to consolidate if there were assets that became available and made sense to you? R. Lane Riggs: Yeah. Hey. This is Lane. So as long. You know, with. it is another region that we like. So if something came available and again, it met our investment criteria, which again, we want to be disciplined and we want to make sure the thing makes sense for the entire economic cycle and not sort of get romanced by the prompt situation. But it is it is a region that is. That we feel like we have a really good position in, and if we could add to it and increase our flexibility and our ability to trade around it and create shareholder value, we would certainly be interested in. Great. Thanks for the answers, guys. Analyst: You. Operator: This brings us to the end of today's question and answer session. I would like to turn the floor back over to Mr. Donovan for closing comments. Brian Donovan: Yes, we appreciate everyone joining us today. And as always, feel free to contact the Investor Relations team if you have any additional questions. Have a great day. Operator: Ladies and gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day. Before you buy stock in Valero Energy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Valero Energy wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Valero (VLO) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Valero Energy Corporation VLO reported third-quarter 2026 adjusted earnings of $23.90 per share, up 553% from $3.66 a year ago. Reported earnings were $23.89 per share compared with $3.53 in the prior-year quarter. Revenues climbed 43.3% year over year to $46.10 billion from $32.17 billion, while also surpassing the Zacks Consensus Estimate by 23.29%. The results benefited from substantially stronger refining margins and improved profitability across the Renewable Diesel and Ethanol segments. Refining throughput averaged 2.97 million barrels per day, down from 3.09 million barrels per day a year earlier. Valero Energy Corporation price-consensus-eps-surprise-chart | Valero Energy Corporation Quote Refining revenues from external customers increased to $44.37 billion from $30.41 billion a year earlier. The segment generated operating income of $8.78 billion compared with $1.61 billion in the third quarter of 2025. Adjusted operating income reached $8.77 billion, up from $1.67 billion in the year-ago period. Refining margin surged to $10.73 billion from $3.73 billion a year ago. On a unit basis, refining margin per barrel of throughput increased to $39.24 from $13.14 a year ago. Adjusted refining operating income per barrel climbed to $32.09 from $5.86. Stronger gasoline and distillate product margins supported the improvement. The Gulf Coast remained the largest contributor, with refining margin increasing to $6.47 billion from $2.07 billion in the corresponding period of 2025. Throughput averaged 1.87 million barrels per day compared with 1.85 million barrels per day a year earlier. The Mid-Continent refining margin rose to $1.71 billion from $485 million, while the North Atlantic margin climbed to $2.13 billion from $811 million. The West Coast refining margin increased to $425 million from $362 million, despite throughput declining to 119,000 barrels per day from 259,000 barrels per day. The Mid-Continent region accounted for 15.9% of the throughput volumes, while North Atlantic and West Coast accounted for 17.1% and 4%, respectively. Renewable Diesel revenues from external customers declined to $664 million from $719 million in the third quarter of 2025. However, the segment reported operating income of $353 million, reversing the year-ago operating loss of $28 million. Renewable Diesel margin surged to $510 million from $126 million in the prior-year quarter. Sales volumes averaged 3.42 million gallons per day, up 26% from 2.72 million a year ago. Renewable diesel margin per gallon of sales improved to $1.62 from 50 cents, while operating income per gallon reached $1.12 versus a loss of 11 cents in the prior-year period. Ethanol revenues from external customers increased to $1.07 billion from $1.04 billion a year earlier. Segment operating income climbed to $272 million from $183 million, reflecting improved profitability alongside higher production volumes. Ethanol margin rose 29.3% to $455 million from $352 million in the corresponding period of 2025. Production volumes averaged a quarterly record of 4.80 million gallons per day compared with 4.64 million a year ago. Ethanol margin per gallon of production improved to $1.03 from 83 cents, while operating income per gallon increased to 62 cents from 43 cents in the year-ago period. Total cost of sales increased to $36.69 billion from $30.4 billion in the year-ago quarter. Cost of materials and other rose to $32.74 billion from $26.13 billion in the corresponding period of 2025. Operating expenses, excluding depreciation and amortization, increased slightly to $1.63 billion from $1.61 billion. Depreciation and amortization included in cost of sales declined to $669 million from $824 million. General and administrative expenses increased to $308 million from $246 million. Net cash from operating activities totaled $6.93 billion, up from $1.88 billion in the prior-year quarter. Excluding working-capital movements and the portion attributable to the other Diamond Green Diesel joint venture member, adjusted operating cash flow reached $7.25 billion. Valero's stockholder cash returns represented 52% of adjusted operating cash flow. Capital investments totaled $432 million, including $371 million for sustaining business activities in the third quarter. Capital investments attributable to Valero amounted to $429 million, compared with $382 million a year earlier. Valero ended September with $9.84 billion in cash and cash equivalents. Total debt stood at $8.58 billion, while finance lease obligations totaled $2.42 billion. The debt-to-capitalization ratio, net of cash, was 4% at the end of the third quarter. The company also completed the St. Charles Refinery FCC Unit optimization project on schedule and within budget. The operational project is expected to enhance production of higher-value products, including alkylate and gasoline. VLO currently sports a Zacks Rank #1 (Strong Buy). Some other top-ranked stocks from the energy sector are PBF Energy PBF, HF Sinclair Corporation DINO and Galp Energia SGPS SA GLPEY, each carrying a Zacks Rank #1 at present. You can see the complete list of today's Zacks Rank #1 stocks here. PBF Energy has a geographically diverse refining network with large-scale processing capacity and a highly complex refining system. It operates six refineries, including Delaware City Refinery, Paulsboro Refinery, Toledo Refinery, Chalmette Refinery, Torrance Refinery and Martinez Refinery, with a combined throughput capacity of 1 million barrels per day and the ability to process a wide range of feedstocks. The diversified refining footprint provides the company exposure to several regional refining markets, supporting higher margins. HF Sinclair Corporation is a leading downstream energy player operating across five segments: Refining, Renewables, Marketing, Lubricants & Specialties, and Midstream. The company's primary earnings driver is its robust network of seven complex refineries across the Mid-Continent, Southwest, Rocky Mountains and Pacific Northwest. The outlook for the company's refining business remains constructive due to tightening supplies of refined products and a supportive crack environment. Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company's oil exploration efforts have yielded positive results, particularly with the Mopane discovery in the Orange Basin, offshore Namibia. This discovery allows Galp to diversify its global presence with the potential to become a significant oil producer in the region. It refines and markets oil products and gas, as well as engages in marketing and sales activities. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Valero Energy Corporation (VLO) : Free Stock Analysis Report PBF Energy Inc. (PBF) : Free Stock Analysis Report Galp Energia SGPS SA (GLPEY) : Free Stock Analysis Report HF Sinclair Corporation (DINO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research