Valero Energy Corporation VLO is set to report first-quarter 2025 results on April 24, before the opening bell. In the last reported quarter, Valero Energy’s adjusted earnings of 64 cents per share beat the Zacks Consensus Estimate of 13 cents due to an increase in renewable diesel margins and lower total cost of sales. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 101.16%. This is depicted in the graph below: 

Valero Energy Corporation Price and EPS Surprise

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

Estimate Trend

The Zacks Consensus Estimate for first-quarter earnings per share of $0.43 has witnessed four downward revisions and no upward revision in the past 30 days. The estimated figure suggests a decline of 88.74% from the prior-year reported number.

The Zacks Consensus Estimate for revenues of $28.45 billion indicates a 10.42% decline from the year-ago recorded figure.

Factors to Consider

Valero Energy is expected to have maintained a stable performance in the first quarter, owing to high refinery utilization rates during this period. Per the data from the U.S. Energy Information Administration, spot prices for West Texas Intermediate Crude dropped nearly 7% from the prior-year quarter’s level. This might have supported the refining player’s profitability by reducing its input costs. Further, a decrease in U.S. refining capacity due to the shutdown of LyondellBasell's Houston refinery is expected to have supported refining margins, aiding VLO’s profitability in the to-be-reported quarter.  

However, challenges are likely to have loomed, particularly in the refining segment, due to declining crack spreads amid softer demand for refined petroleum products, especially from China and the United States. Lower margins on gasoline and distillates are also anticipated to have negatively impacted Valero's profitability in the first quarter. Sluggish demand for refining products from key markets like the United States and China, combined with weaker market crack spreads and increased competition from abroad, might have negatively impacted VLO’s profitability in the to-be-reported quarter.

These factors are anticipated to have affected demand and pricing dynamics, potentially hampering Valero Energy’s quarterly performance.

Earnings Whispers

Our proven model does not indicate an earnings beat for VLO 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: Valero Energy has an Earnings ESP of -14.72%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: VLO currently carries a Zacks Rank #3.

Stocks to Consider

Here are some firms from the energy space that you may want to consider, as these have the right combination of elements to post an earnings beat this reporting cycle.

Antero Resources Corporation AR has an Earnings ESP of +6.35% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Antero Resources is scheduled to release first-quarter 2025 earnings on April 30. The Zacks Consensus Estimate for AR’s earnings is pegged at 85 cents per share, implying 1,114.26% year-over-year growth.

Helmerich & Payne Inc. HP has an Earnings ESP of +7.31% and a Zacks Rank #3 at present.

Helmerich & Payne is set to release first-quarter 2025 earnings on May 7. The Zacks Consensus Estimate for HP’s earnings is pegged at 65 cents per share, indicating a 24.42% decline year over year.

Comstock Resources, Inc. CRK has an Earnings ESP of +22.33% and a Zacks Rank #3 at present.

Comstock Resources is scheduled to release first-quarter earnings on April 30. The Zacks Consensus Estimate for CRK’s earnings is pegged at 15 cents per share, which indicates a 600% year-over-year improvement.

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This article originally published on Zacks Investment Research (zacks.com).

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