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(Reuters) – Valero Energy reported a first-quarter loss compared with a year-ago profit on Thursday, weighed down by lower refining margins and around $1 billion in impairment charges related to its West Coast assets.
Excluding asset impairment loss, the second-largest U.S. refiner by capacity posted an adjusted profit of 89 cents per share, beating tempered expectations of 42 cents per share, according to data compiled by LSEG.
CEO Lane Riggs said the quarter was marked by heavy maintenance across the refining system and a “challenging margin environment” in the renewable diesel segment.
U.S. refineries typically undergo turnaround activity in the first quarter to prepare for higher summer demand, but this seasonal maintenance temporarily limits utilization and revenue.
Valero’s renewable diesel segment, operated through the Diamond Green Diesel joint venture, posted an operating loss of $141 million, a reversal from the $190 million in operating income reported a year earlier.
The core refining business also saw a downturn, with an operating loss of $530 million compared with $1.7 billion in profit in the prior year.
Valero is the first major refiner to report results this earnings season. The results come as the industry braces for a fallout from the ongoing U.S.-China trade tensions, which could dampen demand for refined products such as gasoline, diesel, and jet fuel and hit already struggling refining margins.
U.S. refining margins, as measured by the 3-2-1 crack spread , bounced back in early 2025 after hitting multi-year lows last year, but continue to face pressure from lingering market challenges.
Valero said its quarterly refining margins fell 29.5% to $2.49 billion from the prior year.
The company’s net loss attributable to stockholders was $595 million, or $1.90 per share, in the three months ended March 31, compared with last year’s profit of $1.2 billion, or $3.75 per share.
Reporting by Arunima Kumar in Bengaluru; Editing by Maju Samuel
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