Refiner Valero's Profits Surpass Expectations; Company Names New CEO

Leading U.S. refiner Valero Energy Corp. (VLO) said on Monday that third-quarter profits climbed on tight refined products supply due to storm-shut U.S. refineries, and said that analysts' estimates for its fourth-quarter earnings were "significantly too low."

The company also named Bill Klesse (search) as its new chief executive, effective Jan. 1. Bill Greehey will remain as chairman of the company.

Valero's net income was $862 million, or $2.94 per share after special items, up from $434 million, or $1.57 a share a year ago.

During the quarter Valero completed the $8.7 billion acquisition of independent refiner Premcor Inc.

Excluding a charge related to inventories acquired in that deal, the company posted a net profit of $4.37 per share. A poll of Wall Street (search) analysts yielded average forecast earnings of $3.97 per share, according to Reuters Estimates.

The company said a Wall Street consensus for earnings per share of $3.67 in the fourth quarter was too low, adding that it expected to earn $2.30 per share in October alone. It also forecast a record-setting year for 2006.

But the company said the ongoing impact on consumer gasoline prices of hurricanes Katrina and Rita (search) was almost past, forecasting further declines in pump prices.

Valero shares rose 4 percent to $103.50 in premarket trade on Inet. Valero's shares climbed 43 percent in the third quarter while the S&P 500 index rose 3 percent. Valero plans a 2-for-1 stock split in the fourth quarter.