New throughout, adds comments from analysts

By Nicole Jao and Seher Dareen

Jan 30 (Reuters) - Valero Energy VLO.N on Thursday reported a sharp drop in refining profit and margins for the fourth quarter but still beat analyst estimates.

The San Antonio, Texas-based posted earnings of 64 cents per share, compared with analysts' estimate of 7 cents per share, LSEG data showed.

Wall Street had anticipated a sharper decline in earnings than the U.S. oil refiner reported as global fuel demand slowed and as the industry braced for potential impact from President Donald Trump's threatened tariffs on crude imports from Canada and Mexico.

Valero's refining segment reported operating income of $437 million for the fourth quarter of 2024, down 73% from a year ago. Its refining margins also slid 34.5%.

Its shares were down more than 2% at noon, as investors worried that margins would stay weak.

"Our team's relentless focus on operational excellence and low cost operations enabled us to deliver positive results in the fourth quarter and otherwise weak margin environment," Chief executive Lane Riggs said during a call with analysts.

The refiner's fourth-quarter results were partly helped by better-than-expected margins in the Gulf Coast and North Atlantic regions as well as strong performance of its renewable diesel business, said Jason Gabelman, analyst at TD Cowen.

Its renewable diesel business reported $170 million in fourth-quarter operating income, up from $84 million a year ago.

The company announced on Thursday it was progressing with its FCC Unit optimization project at the St. Charles Refinery that will enable it to increase the yield of high-value products.

The project is estimated to cost $230 million and is expected to be completed in 2026.

(Reporting by Nicole Jao in New York, Seher Dareen in Bengaluru; Editing by Shinjini Ganguli and David Gregorio)

((Seher.Dareen@thomsonreuters.com; If in India call +91 74832 70128;))