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SAN ANTONIO -- Valero Energy Corp.'s retail segment again set a record, generating $135 million in operating income and marking the second-best quarter in its history.
Valero's second-quarter 2011 earnings, released earlier today, noted that the increase in the retail segment's operating income was mainly due to higher retail fuel margins, plus its Canadian retail division achieved its highest quarterly operating income on record at $48 million.
As for all segments of Valero Energy, the largest independent crude refiner in the United States reported net income of $745 million during its fiscal second quarter, which ended on June 30. The results exceeded the $520 million the company earned during the same period in 2010. However, analysts expected the company to earn approximately $832 million during this latest quarter. The earnings shortfall is likely due to Valero losing money on refining fuel in Canada, where the company relies on higher-priced import crude, according to analysts.
Valero saw net earnings grow dramatically compared to last year, while operating revenues also rocketed higher. Valero reported revenues of $31.29 billion for its latest quarter, compared to $20.56 billion during 2010's second quarter. "Our earnings momentum continues to build," Bill Klesse, Valero chairman and CEO, said in the earnings release.
As for the future, Klesse said with crude oil prices "holding in a range and global economic growth continuing, refined product demand will grow. Benchmark margins in the third quarter have increased from second-quarter levels, and the forward curve shows margins are strong into 2012.”