SAN ANTONIO (AP) — Valero Energy Corp.'s net income increased 11.7 percent in the second quarter as it expanded its fuel-making operation in the United Kingdom.
The San Antonio oil refiner also said Tuesday it plans to split off its retail gasoline business. Valero is looking at several options, including the distribution of the business to shareholders.
Chairman and CEO Bill Klesse said the move will make the company more flexible. "As independent companies, both retail and the remaining business will be better-positioned to focus on their industry-specific strategies," Klesse said.
It's making the announcement at a time when the gasoline business looks especially attractive. Valero's retail business boosted income by 27.4 percent in the second quarter.
Shares of Valero rose $1.20, or 4.6 percent, to $27.28 in premarket trading.
Valero makes and sells gasoline and other petroleum products at 16 plants in North America and Europe. It expanded its operation in August, buying the Pembroke refinery in Wales from Chevron Corp. for $1.7 billion. The Pembroke refinery boosted Valero's results during the April-June quarter.
Valero reported earnings of $831 million, or $1.50 per share, for in the period. That compares with $744 million, or $1.30 per share, for the same part of 2011. Revenue increased by 10.8 percent to $34.7 billion.
Analysts were expecting earnings of $1.44 per share on revenue of $33.6 billion, according to FactSet.
During the period, Valero said that the addition of the Pembroke plant helped the company increase production in the quarter by 15.2 percent to 2.68 million barrels per day. The increase made up for weaker profit margins in the period. Valero's refineries earned $5.64 per barrel in the second quarter, compared with $5.94 per barrel a year earlier. Profitability fell as the price of imported oil rose.
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