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SAN ANTONIO -- Wounded by plant shutdowns, Valero Energy Corp. reported a quarterly loss Tuesday, but pointed to improving margins for gasoline, diesel and other products in some markets as demand rises.
Net loss in the first quarter was $113 million, compared with a profit of $309 million a year earlier.
Refining profitability fell along with demand, but some analysts forecast improvement as the worldwide economy improves, Reuters reported.
"Looking at the rest of the year, we are cautiously optimistic about our business. U.S. and global economic indicators continue to trend higher, which should lead to improved demand for our products," Bill Klesse, Valero's chief executive, said in a statement.
"However, refining margins are likely to be constrained due to the ongoing abundance of spare refining capacity in the U.S., Western Europe, and Japan."
Retail had its best first quarter in Valero's history with $71 million in operating income.
Valero has seen good margins in several of its markets for gasoline, diesel and other products, including petrochemical feedstocks and asphalt. Also, West Coast margins are beginning to show improvement, Reuters reported. The company expects to be profitable in April and for the entire second quarter.
"We're seeing better gasoline demand numbers and some improvement on the diesel side. On the broader economy, generally things are pointing up, so all that is good news for Valero," Roger Read, oil analyst with Natixis Bleichroeder, told Reuters.
Heavy maintenance at refineries, including Port Arthur, Corpus Christi, St. Charles, Quebec, and Memphis resulted in lost income in the first quarter of about $200 million, the company said. Revenue rose 47 percent to $19.6 billion.
The amount product processed in Valero's plants decreased from a year ago by 254,000 barrels per day as a shutdown of its Aruba refinery was extended, the company said. Ethanol earned $57 million of operating income in the first quarter, which was Valero's second-highest quarter for ethanol since the company entered the business last year. Valero acquired three ethanol plants in the first quarter at values below replacement cost, and quickly restarted two plants that had not been operating. Ten Valero ethanol plants are now operating.
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