Valero ( VLO) blew past third-quarter estimates, ratcheted up fourth-quarter guidance and named a new CEO, saying longtime chief Bill Greehey would focus on his chairman's duties.

The San Antonio, Texas, energy giant made $1.28 billion, or $4.37 a share, for the quarter ended Sept. 30, up from the year-ago $431 million, or $1.57 a share. Revenue surged to $23.3 billion from $14.3 billion a year earlier. Analysts surveyed by Thomson First Call had been looking for a $4.23-a-share profit on revenue of $18.96 billion.

The third quarter 2005 results exclude a $621 million pre-tax LIFO charge to cost of goods sold, related to the difference between the fair market value of the inventories acquired from Premcor Inc. on September 1, 2005 and Valero's recorded amounts under LIFO accounting attributable to those inventories. Including this special non-cash item, net income for the third quarter of 2005 was $862 million, or $2.94 per share.

"This was a challenging quarter for Valero in so many ways given the hurricanes on the Gulf Coast and the addition of four new refineries to our system, but our employees did an outstanding job meeting these challenges," said Greehey, who will give way Jan. 1 as CEO in favor of operating chief Bill Klesse. "In particular, the efforts of our employees at the St. Charles and Port Arthur refineries were nothing short of heroic in restoring our operations in record time and helping their communities recover from these devastating storms.

"The impact of these hurricanes reflects what we've been saying for years -- that refining capacity has gotten tighter, not just in the U.S., but globally. Anytime there is a major disruption, margins are likely to spike. Just as they did shortly after Hurricanes Katrina and Rita, pump prices spiked up, but then came down. We believe that the impact of these hurricanes on pump prices will soon be behind us. As more refineries come back on-line, pump prices should continue to fall and that is good for both refined product demand and the economy," said Greehey.

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