Valero Energy Q2 Results: Net Profit Surges 420% YoY to $3.7 Billion
Valero Energy reported Q2 2026 net income of $3.7 billion ($12.62 per share), sharply higher than $714 million ($2.28 per share) in Q2 2025, supported by strong performance across all three segments. Total revenues rose to $44,476 million from $29,889 million year-over-year. The Refining segment posted operating income of $4.5 billion, the Renewable Diesel segment swung to $717 million from a loss of $79 million, and the Ethanol segment earned $318 million. Stockholder cash returns totaled $2.6 billion, and a quarterly dividend of $1.20 per share was declared on July 16, 2026.
*this image is generated using AI for illustrative purposes only.
Valero Energy Corporation reported a sharp rebound in profitability for the second quarter of 2026, with net income attributable to stockholders surging to $3.7 billion, or $12.62 per share, compared to $714 million, or $2.28 per share, in the second quarter of 2025. Adjusted net income for the quarter was also $3.7 billion, or $12.54 per share. The results were driven by strong operational and commercial execution across all three business segments — Refining, Renewable Diesel, and Ethanol.
"We are pleased to report a strong second quarter, driven by excellent operations and commercial execution across all three of our business segments," said Lane Riggs, Valero's Chairman, Chief Executive Officer and President. "Our refineries, renewable diesel plants, and ethanol plants operated safely and reliably, helping to meet resilient demand for transportation fuels."
Key Financial Highlights
The following table summarizes Valero's key financial metrics for the second quarter and first half of 2026 compared to the same periods in 2025 (in millions of dollars, except per share amounts):
| Metric: | Q2 2026 | Q2 2025 | H1 2026 | H1 2025 |
|---|---|---|---|---|
| Revenues: | $44,476 | $29,889 | $76,857 | $60,147 |
| Total Cost of Sales: | $39,007 | $28,640 | $69,336 | $58,391 |
| Operating Income: | $5,196 | $997 | $6,927 | $97 |
| Net Income (Attributable to Valero Stockholders): | $3,720 | $714 | $4,983 | $119 |
| Earnings Per Share (Basic): | $12.62 | $2.28 | $16.79 | $0.37 |
| Earnings Per Share (Diluted): | $12.62 | $2.28 | $16.78 | $0.37 |
| Adjusted EPS (Diluted): | $12.54 | $2.28 | $16.71 | $3.17 |
Segment Performance
All three of Valero's operating segments delivered significantly improved results compared to the second quarter of 2025. The following table presents operating income by segment for the three months ended June 30, 2026 and June 30, 2025 (in millions of dollars):
| Segment: | Q2 2026 Operating Income | Q2 2025 Operating Income |
|---|---|---|
| Refining: | $4,470 | $1,266 |
| Renewable Diesel: | $717 | $(79) |
| Ethanol: | $318 | $54 |
| Corporate and Other: | $(309) | $(244) |
| Total: | $5,196 | $997 |
Refining Segment
The Refining segment reported operating income of $4.5 billion for the second quarter of 2026, compared to $1.3 billion for the second quarter of 2025. Adjusted operating income for the second quarter of 2026 was $4.4 billion. Refining throughput volumes averaged 3.0 million barrels per day in the second quarter of 2026. The overall refining margin for the quarter was $6,342 million, compared to $3,284 million in Q2 2025, while the refining margin per barrel of throughput was $23.62, up from $12.35 in the prior-year period.
Renewable Diesel Segment
The Renewable Diesel segment, which consists of the Diamond Green Diesel joint venture (DGD), reported $717 million of operating income for the second quarter of 2026, compared to an operating loss of $79 million for the second quarter of 2025. Segment sales volumes averaged 3,833 thousand gallons per day in the second quarter of 2026. The Renewable Diesel margin per gallon of sales was $2.52, compared to $0.22 in Q2 2025.
Ethanol Segment
The Ethanol segment reported $318 million of operating income for the second quarter of 2026, compared to $54 million for the second quarter of 2025. Ethanol production volumes averaged 4,666 thousand gallons per day in the second quarter of 2026. The ethanol margin per gallon of production was $1.15, up from $0.13 in Q2 2025.
Cash Flow, Capital Investments, and Shareholder Returns
Net cash provided by operating activities was $5,580 million in the second quarter of 2026. Excluding working capital changes of $706 million and $389 million of adjusted net cash provided by operating activities associated with the other joint venture member's share of DGD, adjusted net cash provided by operating activities was $4,485 million.
Capital investments totaled $350 million in the second quarter of 2026, of which $290 million was for sustaining the business, including costs for turnarounds, catalysts, and regulatory compliance. Capital investments attributable to Valero were $346 million in the second quarter of 2026.
Valero returned $2.6 billion to stockholders in the second quarter of 2026, representing a payout ratio of 59 percent of adjusted net cash provided by operating activities. On July 16, 2026, Valero declared a quarterly cash dividend of $1.20 per share on common stock.
Liquidity and Balance Sheet
The following table presents key balance sheet data as of June 30, 2026 and December 31, 2025 (in millions of dollars):
| Metric: | June 30, 2026 | December 31, 2025 |
|---|---|---|
| Cash and Cash Equivalents: | $7,874 | $4,688 |
| Total Debt: | $9,101 | $8,261 |
| Total Finance Lease Obligations: | $2,248 | $2,358 |
| Total Debt and Finance Lease Obligations: | $11,349 | $10,619 |
| Valero Stockholders' Equity: | $25,001 | $23,725 |
Valero ended the second quarter of 2026 with $9.1 billion of total debt, $2.2 billion of total finance lease obligations, and $7.9 billion of cash and cash equivalents. The debt-to-capitalization ratio, net of cash and cash equivalents, was 11 percent as of June 30, 2026.
"Our strong results reflect the discipline and consistency of our operational and commercial execution," said Riggs. "Coupled with our differentiated balance sheet, these strengths position us well and provide significant financial flexibility."
Strategic Update
Valero continues to make progress on the FCC Unit optimization project at the St. Charles Refinery, which is designed to enhance the refinery's ability to produce high-value products. This $230 million project is still expected to be completed and begin operations in the third quarter of 2026.
How might the significant surge in refining margins impact Valero's capital allocation strategy between shareholder returns and future expansion projects?
What are the long-term sustainability prospects for the Renewable Diesel segment's profitability given the rapid margin expansion from a loss to $717 million in operating income?
Could the completion of the St. Charles Refinery FCC Unit optimization project materially alter Valero's competitive positioning in high-value product yields for the remainder of 2026?
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