What's in the Offing for Valero Energy's (VLO) Q3 Earnings?

Valero Energy Corporation VLO is set to report earnings for third-quarter 2022 on Oct 25, before the opening bell.

In the last reported quarter, Valero Energy’s earnings per share of $11.36 beat the Zacks Consensus Estimate of $9.70, thanks to increased refinery throughput volumes and a higher refining margin. Its earnings per share beat the Zacks Consensus Estimate in all the past four quarters, with the average surprise being 33.5%. This is depicted in the graph below:

Valero Energy Corporation Price and EPS Surprise

Valero Energy Corporation price-eps-surprise | Valero Energy Corporation Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for third-quarter earnings per share of $6.78 has witnessed one upward and four downward revisions over the past 30 days. The estimated figure suggests a 455.7% improvement from the prior-year reported number.

The consensus estimate for third-quarter revenues of $39 billion indicates a 32.2% increase from the year-ago reported figure.

Factors to Consider

Gasoline price was much higher in the third quarter than a year ago, thanks to demand recovery. In fact, refining capacity for processing oil into end products like gasoline was not sufficient to support handsome fuel demand, thereby leading to elevated fuel prices. Hence, Valero Energy, having 15 refineries with a throughput capacity of 3.2 million barrels per day, is likely to have benefited from improved fuel prices.

Notably, the Zacks Consensus Estimate for Valero Energy’s operating income from the refining business is pegged at $3,813 million, suggesting an improvement from $835 million reported in the third quarter of 2021.

Earnings Whispers

Our proven model does not indicate an earnings beat for Valero Energy 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.

Earnings ESP: VLO’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Valero Energy currently carries a Zacks Rank #2.

Stocks to Consider

Here are some firms that you may want to consider, as these have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

Schlumberger Limited SLB has an Earnings ESP of +0.23% and is a Zacks #2 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.

Schlumberger is scheduled to release third-quarter results on Oct 21. The Zacks Consensus Estimate for SLB’s earnings is pegged at 55 cents per share, suggesting an increase of 52.8% from the prior-year reported figure.

Diamondback Energy, Inc. FANG has an Earnings ESP of +0.85% and a Zacks Rank of 3.

Diamondback is scheduled to report third-quarter results on Nov 7. The Zacks Consensus Estimate for FANG’s earnings is pegged at $6.53 per share, suggesting a significant increase from the prior-year reported figure.

Halliburton Company HAL has an Earnings ESP of +1.54% and a Zacks Rank #2.

Halliburton is scheduled to release third-quarter earnings on Oct 25. The Zacks Consensus Estimate for HAL’s earnings is pegged at 56 cents per share, suggesting a massive increase from the prior-year reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.