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SAN ANTONIO -- Major oil company Valero Energy Corp. saw net income drop 49 percent to $567 million in the fourth quarter of fiscal 2007, compared to the $1.11 billion seen in the year-ago period, but beat analysts' expectations of per-share profit by 43 cents, Bloomberg News reported.
The company's per share earnings fell to $1.02 in the fourth quarter, compared to $1.80 seen in the fourth quarter of 2006, according to the report. The per-share profit was supported by a cut in the company’s tax rate and increased use of low-grade crude oil, while cutting usage of the most expensive crudes by 3.3 percent, the report stated.
"Analysts were expecting the worst, given the challenges facing the refining sector," Roger Read, an analyst at Natixis Bleichroeder Inc. in Houston, told Bloomberg News. "Valero's performance highlights the benefits of its size and the diversity of its feedstocks and geography.''
Meanwhile, profit from the company's retail gas stations more than tripled to $66 million, Bloomberg News reported, citing the company. Valero's U.S. stores reeled in a margin of 17.2 cents per gallon on fuel, up from 12.6 cents a year earlier, according to the report.
In addition, Valero's revenue rose 52 percent to $28.7 billion, excluding the sale of an Ohio facility last year, Bloomberg News reported.
"We've downgraded all refining stocks, but if you must own a refiner, it should be Valero," Fadel Gheit, an analyst at New York-based Oppenheimer & Co., told Bloomberg News. "They're better positioned to weather the storm than any of the competition."