NEW YORK ? Valero Energy Corp. said Tuesday its profit soared in the third quarter as it cut raw material costs while the price of gasoline and other fuels increased. Valero also boosted production.
America's largest oil refiner reported net income of $1.2 billion, or $2.11 per share, for the three-month period ended Sept. 30. That compares with $292 million, or 51 cents per share, a year earlier.
Revenue increased 60.4 percent to $33.7 billion from $21 billion a year ago.
The results were Valero's best in four years. They also beat Wall Street expectations of $1.80 per share on revenue of $31.4 billion, according to FactSet.
CEO Bill Klesse said this year's rise in oil prices is still "supportive of global demand growth." Western Europe may continue to suffer as it works through a credit crisis, but Klesse said the company sees "continued product demand from international markets."
Yet he warned that its refineries were less profitable in the final three months of the year due to recent price swings for oil and petroleum productions.
Shares fell 69 cents, or 2.8 percent, to $23.91 in premarket trading.
From July to September, the San Antonio company focused on using light-sweet oil varieties that were cheaper than others. One of those varieties was West Texas Intermediate crude, which at times was $20 to $30 per barrel cheaper than Brent crude, the international benchmark oil.
Meanwhile, retail gasoline prices rose 33.1 percent, diesel prices rose 31.8 percent and jet fuel prices rose 46.1 percent.
Valero took advantage of those price increases by cranking up fuel production. Its refineries churned out an average increase of 389,000 barrels per day. The company's production also got a boost in the quarter by the addition of two refineries ? one that was acquired in August, and another that wasn't in operation last year.
The company also reported that its ethanol business more than doubled profits in the quarter and set a company earnings record at $107 million in the quarter. Its retail business, which includes Valero gasoline stations, saw profits drop 8 percent to $97 million.
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