Last time around, oil refiner Valero Energy
That interim update softened the 72% body blow to operating income, but it still stings -- especially considering that over a fifth of operating income came from a one-time insurance gain. If you're wondering how a company that refines and sells gasoline could have such a lousy quarter, trust me -- Valero, Frontier Oil
Refiners have to buy the oil they refine, so when oil prices rise faster than those of Valero's products, the company's profitability gets pinched. For the quarter, per-barrel margins contracted 8% since the prior quarter. This wasn't the only thing throwing profits out of whack, though. Throughput was also down as a result of various refinery outages, and rising natural gas costs drove expenses higher.
Valero's clearly not in love with all of its refineries. The facility in Aruba is on the brink of being sold to Petrobras
The latter company, helmed by a duo of master investors, has been making significant moves in natural resources lately, with large investments in both an Australian iron ore project and Argentine agricultural attraction Cresud
Petrobras is an Income Investor selection, and Cresud is a Global Gains pick. Give any of our refined newsletters a spin, free for 30 days.
Fool contributor Toby Shute doesn't have a position in any company mentioned. The Motley Fool has a disclosure policy.