SAN ANTONIO (AP) — Valero Energy Partners reported a 28 percent drop in first-quarter net income on Wednesday, as a rough winter curbed demand for the petroleum products that flow through its pipelines.
The San Antonio company, spun out of Valero Energy Corp. last year, reported net income of $10.5 million, or 18 cents per unit, in its first full quarter as a publicly traded company. That's a sharp fall from the $14.5 million in net income the company reported in the same period of last year.
Higher costs were partly to blame. Total expenses rose 29 percent over the prior year to $5.8 million. Operating revenue shrank to $21.5 in the first quarter from $23.5 million the previous year. The company said "harsh winter weather" weighed on demand for its refined petroleum products.
On average, analysts expected Valero Energy Partners LP to post earnings of 18 cents per unit and revenue of $22.5 million.
The San Antonio company was formed by the refinery operator Valero Energy Corp. to own and operate pipelines, terminals and other assets. It owns properties in the Gulf Coast and Midwest that support Valero's refineries in Texas and Tennessee. Valero Energy Partners makes money by charging for transporting crude oil and refined petroleum products.
Shares of the oil pipeline owner were up 14 cents to $43.70 in afternoon trading on Wednesday. The company went public in December at $23 a share.