Valero Energy (VLO) Q1 2026 earnings summary

Executive summary

• Net income attributable to stockholders was $1.3 billion ($4.22/share) for Q1 2026, reversing a net loss of $595 million ($1.90/share) in Q1 2025, driven by strong global demand, higher refining margins, and operational optimization amid market volatility and geopolitical disruptions.

• Operating income rose to $1.7 billion from a loss of $900 million year-over-year, with all segments showing improved performance, especially the Refining segment.

• Quarterly cash dividend increased by 6% to $1.20 per share; stockholder cash returns totaled $938 million, a 59% payout ratio of adjusted net cash from operations.

• Progressed on the $230 million FCC optimization project at St. Charles, expected online in Q3 2026.

• The company began idling the Benicia Refinery and completed the process in April 2026; a fire at the Port Arthur Refinery led to a temporary shutdown but operations resumed at reduced capacity.

Financial highlights

• Revenues rose to $32.4 billion in Q1 2026 from $30.3 billion in Q1 2025, with net income of $1.3 billion ($4.22/share) and operating income of $1.7 billion, compared to a loss of $900 million in Q1 2025.

• Refining segment operating income was $1.8 billion, up from a $530 million loss in Q1 2025; Renewable Diesel segment operating income was $139 million, versus a $141 million loss; Ethanol segment operating income was $90 million, up from $20 million.

• Net cash provided by operating activities was $1.4 billion, with adjusted net cash at $1.6 billion after certain items.

• Shareholder cash returns totaled $938 million, with a payout ratio of 59%.

• Capital investments totaled $448 million, with $404 million for sustaining the business.

Outlook and guidance

• Expect constrained global refining capacity and low inventories to support refining fundamentals; global demand for gasoline, diesel, and jet fuel remains strong but growth has moderated due to Middle East conflicts.

• Q2 2026 refining throughput guidance: Gulf Coast 1.69–1.74 million bpd (reflecting reduced Port Arthur rates), Mid-Continent 450–470k bpd, West Coast 120–130k bpd (Benicia idled), North Atlantic 480–500k bpd.

• Q2 refining cash operating expenses expected at ~$4.85/bbl; renewable diesel sales ~320 million gallons, ethanol production 4.7 million gallons/day.

• Additional capital expenditures expected for Port Arthur repairs, covered by insurance; updated guidance pending cost estimate.

• Renewable diesel demand is projected to rise due to increased EPA renewable volume obligations.