Valero Energy (VLO) swung to a loss of $3.28 billion in the fourth quarter, mostly due to a $4 billion impairment charge.
The San Antonio-based oil refiner lost $6.36 a share in the quarter, compared with a profit of $567 million, or $1.04 a share, in the year-ago period. Absent the charge, Valero said it would have earned $1.41 per share.
Analysts polled by Thomson Reuters expected EPS of 93 cents. Analysts usually exclude one-time items from estimates.
Valero says quarterly revenue dropped 35% to $18.6 billion.For 2008, Valero reorted a net loss of $1.1 billion, or $2.16 per share. Excluding the goodwill loss, full-year 2008 net income was $2.9 billion, or $5.42 per share, which compares to full-year 2007 income from continuing operations of $4.6 billion, or $7.72 per share. "Despite very low gasoline margins in the fourth quarter, we reported solid operating results that showed the competitiveness of our operations," said Bill Klesse, chairman and CEO. "Our complex refineries benefited from favorable discounts on feedstocks, and our retail network had a record quarter when its margins improved as crude oil prices declined. Regarding the goodwill write-down, investors should understand that this noncash charge does not affect the cash flow generation from our assets or Valero's competitive position within the refining industry." Valero is also scaling back capital expenditures for 2009. "Considering the uncertain outlook for the economy, we are severely reducing our estimate for full-year 2009 capital spending to $2.7 billion from the previous estimate of $3.5 billion," Plesse said. "We are cutting discretionary projects at many of our refineries and delaying other projects, although our safety and regulatory projects remain as planned. Working to grow long-term value for our shareholders, while maintaining a strong balance sheet, remains our top priority." Valero shares were trading lower Tuesday, down $1.56, or 6%, to $24.29.
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