(Reuters) - Independent U.S. refiner Valero Energy Corp reported a smaller-than-expected quarterly loss on Thursday, adding that it saw “a rapid recovery” in demand for its products as the quarter progressed.
The results, which kicked off U.S. refining earnings, failed to lift investor sentiment as shares of the company and other refiners fell 3% to 7%, dragged down by oil prices that plummeted on concerns fuel demand recovery could be capped by a resurgence in coronavirus infections.
Global fuel consumption in the second quarter recovered from record lows in March and April, as countries started emerging from lockdowns.
“While the impact of the pandemic and the ensuing global economic downturn so far this year has been significant, we saw a rapid recovery in demand for refined products as we moved through the quarter,” Valero’s Chief Executive Officer Joe Gorder said.
Valero forecast current-quarter throughput, or the volume of crude processed by its refineries, to be about 2.43 million barrels per day (bpd), down more than 18% from a year earlier.
Throughput for the second quarter dropped 22% to 2.3 million bpd, while refining margins fell 58% to $1.08 billion.
Credit Suisse analyst Manav Gupta said the results were better-than-feared, helped by Valero’s renewable diesel and ethanol segments. He added refining equities would move higher or lower, depending upon whether Texas, Florida and Arizona can successfully avoid another virus-led shutdown.
On an adjusted basis, Valero lost $1.25 per share in the reported quarter, compared to analysts’ estimates of a loss of $1.41 per share loss, according to Refinitiv IBES.
The San Antonio, Texas-based company also recorded a gain of $1.8 billion in the quarter related to inventory valuation.
Reporting by Shradha Singh in Bengaluru; Editing by Ramakrishnan M.