What to Expect When Valero Energy (VLO) Reports Third-Quarter Earnings Tuesday

NEW YORK (TheStreet) -- Shares of Valero Energy  (VLO) rose 1.3% to $50.74 in morning trading Monday ahead of the company's scheduled third-quarter earnings report Tuesday before the market open. Here's what analysts are expecting from the energy company.

The consensus estimate calls for Valero to report earnings of $1.57 a share on revenue of $31.58 billion. In the third quarter last year, Valero posted earnings of 57 cents a share, which easily beat analysts' expectations of 41 cents a share. Revenue totaled $36.14 billion, which surpassed the consensus estimate of $29.76 billion.

In the second quarter of 2014, Valero reported earnings of $1.22 a share, which edged analysts' estimate of $1.21 a share. Revenue totaled $34.91 billion, which beat the consensus estimate of $29.16 billion.

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Separately, TheStreet Ratings team rates VALERO ENERGY CORP as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate VALERO ENERGY CORP (VLO) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, increase in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • VLO's revenue growth has slightly outpaced the industry average of 1.9%. Since the same quarter one year prior, revenues slightly increased by 2.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • VALERO ENERGY CORP has improved earnings per share by 45.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, VALERO ENERGY CORP increased its bottom line by earning $4.97 versus $3.75 in the prior year. This year, the market expects an improvement in earnings ($5.49 versus $4.97).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Oil, Gas & Consumable Fuels industry average. The net income increased by 26.2% when compared to the same quarter one year prior, rising from $466.00 million to $588.00 million.
  • You can view the full analysis from the report here: VLO Ratings Report

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