HOUSTON, Oct. 27, 2009 (Xinhua News Agency) -- Valero Energy Corp. (NYSE:VLO) , the largest U. S. refiner, posted a wider-than-expected loss in the third-quarter on shrinking margins and low fuel demand.
According to an earnings statement issued Tuesday, the Texas- based company reported a loss of 489 million U.S. dollars, compared with a 1.2 billion profit at the same time last year. It is the second quarterly loss in a row for Valero. Revenue also decreased 46 percent from the year-earlier quarter to 19.49 billion dollars.
The third quarter has historically been a profitable period for Valero because fuel demand is higher in the U.S. summer season. The company had not reported a third-quarter loss since 1997.
"Refining margins in the third quarter continued to suffer from a combination of weak demand for refined products and high inventories," said Bill Klesse, the company's CEO.
Chief Financial Officer Mike Ciskowski said the company expects a fourth-quarter loss "at least as large" as the nearly quarter-billion dollar deficit, excluding items, registered in the third quarter.
But Klesse expects some recovery in 2010. "We view 2009 as a tough period for refined product demand, and we look forward to an upturn in fundamentals and demand in 2010," he said.
Valero, hurt by rising heavy-crude costs, has been targeting unprofitable plants for production cuts and shutdowns. In the third quarter, it extended the shutdown of its Aruba refinery. At its Delaware City refinery, the company streamlined operations by closing the gasifier complex and idling the coker. It also began to cut costs at its Paulsboro refinery in October.
