VLO - Valero Energy Corp - surprised to the upside in 13 out of the past 16 quarters

Valero Energy Corporation (VLO), a Zacks #1 Rank stock, exceeded analysts’ earnings expectations in 13 out of the past 16 quarters, most recently by 10.4% in the fourth quarter of 2006. VLO increased revenues and expanded gross margins for the past eight years. On Jan 18, the Board of Directors approved a 50% boost in the company's regular quarterly cash dividend to 12 cents per share. VLO has a return on equity of 31%, compared to 8% for the industry average. Full Analysis Valero Energy Corporation is the largest refiner in North America, with a throughput capacity of approximately 3.3 million barrels per day. Its refining activities include refining operations, wholesale marketing, product supply and distribution, and transportation operations. VLO’s geographically diverse refining network stretches from Canada to the U.S. Gulf Coast and West Coast to the Caribbean. When it comes to topping analysts’ earnings expectations, VLO has a fairly solid track record. The company surprised to the upside in 13 out of the past 16 quarters, most recently by 10.4% when it posted fourth-quarter profits of $1.59 per share. Both VLO’s profits and revenues, when compared to the fourth quarter of last year, were down. The prior-year period’s results reflected a rise in energy prices following Hurricanes Katrina and Rita, which hit the Gulf Coast in August and September. VLO is scheduled to report its first-quarter results on Apr 24. For the entire year, VLO reported record profits of $5.5 billion, or $8.64 per share, up from $3.6 billion, or $6.10 per share, in 2005. Revenues jumped to $91.8 billion from $82.2 billion last year. VLO increased revenues and expanded gross margins for the past eight years. The company grew profits for four years running. Analysts have been growing increasingly optimistic about the company’s future earnings prospects. Consensus estimates for both this quarter and next are up 15 cents and 11 cents, respectively, over the past month. Seven analysts upped their estimates for this quarter while two did so for next quarter. Profit forecasts for this year and next experienced 19-cent and 20-cent increases, respectively, over the same period of time. Eight analysts upped their estimates for this year while three followed suit for next year. Earnings per share are projected to grow 17% over the next 3-5 years, with the industry expected to grow at an 8% clip. On Jan 18, the Board of Directors approved a 50% boost in the company's regular quarterly cash dividend to 12 cents per share from eight cents. VLO has a current dividend yield of 0.73% and a five-year average dividend yield of 0.75%. The Board also authorized a $2-billion common stock repurchase program on Oct 23, 2006. At the time of the announcement, the company bought back roughly 33 million shares at a cost of about $1.9 billion year-to-date. VLO’s return on equity, a common measure of profitability, dwarfs that of the industry average—31% compared to 8%. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. | Blog Home| VitalStocks Home