NewMarket Corporation Releases Third Quarter 2024 Financial Results By Investing.com

NewMarket Corporation (NEU) has announced its financial results for the third quarter of 2024, reporting net income of $132 million, or $13.79 per share, up from $111 million, or $11.60. dollars per share, from the previous year. Despite a slight decrease in petroleum additives sales from $664 million in the third quarter of 2023 to $663 million in the third quarter of 2024, the company saw an increase in operating profits in this segment, primarily due to the reduction of operating costs and raw materials. The recent acquisition of American Pacific Corp. (AMPAC) has been integrated into NewMarket's specialty materials segment, contributing $59 million in sales during the quarter.

Key takeaways

• NewMarket Corporation reports net income of $132 million for the third quarter of 2024, up from $111 million for the third quarter of 2023.
• Earnings per share (EPS) increased to $13.79, compared to $11.60 in the same quarter last year.
• Sales of petroleum additives were almost stable at $663 million, while operating profit in this segment increased to $157 million.
• The acquisition of AMPAC is reflected in the specialty materials segment, with sales of $59 million during the quarter.
• NewMarket anticipates variations in AMPAC's quarterly results, but expects full-year results to meet pre-acquisition expectations.
• The company paid dividends of $24 million and invested $14 million in capital expenditures during the quarter.
• The net debt/EBITDA ratio stood at 1.4, below the target range of 1.5 to 2.

Company Outlook

• NewMarket anticipates capital expenditures to be between $50 million and $70 million for the full year 2024.
• The company maintains a focus on managing margins and operating costs, inventory levels and portfolio profitability.
• Long-term objectives remain a priority, with a focus on creating value for shareholders and customers.

Bearish Highlights

• Sales of petroleum additives experienced a slight drop from the previous year's figures.
• The operating income of the special materials segment does not reflect margin due to the sale of inventory acquired from AMPAC recorded at fair value.

Bullish Highlights

• Increased operating profit from petroleum additives due to lower operating and raw material costs.
• Strong cash flow generation during the quarter.
• Successful integration of AMPAC into NewMarket operations.

failure

• No specific financial errors were reported in the earnings call.

Featured Questions and Answers

• The company did not hold a question and answer session, but is available to answer questions by email or phone.

NewMarket Corporation's third quarter results demonstrate strong financial performance with higher net revenues and operating profits in the petroleum additives segment. The acquisition of AMPAC has expanded the company's specialty materials portfolio, although it has not yet contributed to profit margins due to fair value accounting for acquired inventory. NewMarket's strategic focus on cost management and long-term growth, coupled with its strong cash flow and prudent debt management, positions it to continue its commitment to delivering value to stakeholders. Company executives remain available for future inquiries from interested parties.

InvestingPro Insights

NewMarket Corporation's (NEU) strong financial performance in Q3 2024 is further supported by data from InvestingPro. Company's P/E ratio of 12.58 and Adjusted P/E ratio of 11.55 for trailing twelve months ending Q3 2024 indicate that the stock is trading at a relatively attractive valuation compared to its earnings . This is in line with advice from InvestingPro that suggests NEU is “trading at a low P/E ratio relative to near-term earnings growth.”

The company's commitment to profitability for shareholders is evident in its dividend policy. InvestingPro data shows a current dividend yield of 1.85% and dividend growth of 11.11% over the trailing twelve months. An InvestingPro tip highlights that NewMarket “has increased its dividend for 5 consecutive years,” underscoring the company's financial stability and its commitment to returning value to shareholders.

NewMarket's profitability is also noteworthy, with a gross profit margin of 30.84% ​​and an operating income margin of 20.68% for the trailing twelve months to the third quarter of 2024. This strong profitability is reflected in another advice from InvestingPro stating that the company has been “profitable over the last twelve months.”

For investors looking for a more comprehensive analysis, InvestingPro offers additional ideas and tips, with 8 more tips available for NewMarket Corporation on the platform.

Full transcript – NewMarket Corp (NEU) Q3 2024:

Operator: Good morning and welcome to NewMarket Corporation's scheduled conference call and webcast to review third quarter 2024 financial results. At this time, all participants are in listen-only mode. I would now like to turn the floor over to your host, Bill Skrobacz. The apartment is yours.

bill scraper: Thank you, Kelly, and thank you all for joining me this afternoon. As a reminder, some of the statements made during this conference call may be forward-looking. Relevant factors that could cause actual results to differ materially from such forward-looking statements are contained in our earnings release and our filings with the SEC, including our most recent Form 10-K. During this call, I will also discuss the non-GAAP financial measures included in our earnings release. The earnings release, which can be found on our website, includes a reconciliation of non-GAAP financial measures to comparable GAAP financial measures. We filed our 10-Q this morning. It contains many more details about our company's operations and performance. Please take the time to review it. I will refer to the data that was included in last night's earnings release. Net income for the third quarter of 2024 was $132 million, or $13.79 per share, compared to net income of $111 million, or $11.60 per share, for the same period of the year past. Petroleum additives sales for the third quarter of 2024 were $663 million compared to $664 million for the same period in 2023. Petroleum additives operating income for the third quarter of 2024 was $157 million compared to $140 million for the third quarter of 2023. The increase in Petroleum Additives operating profit was primarily due to lower operating and raw material costs, partially offset by lower sales prices. We remain pleased with the strong performance of our petroleum additives business through the first 9 months of 2024. We continue to see favorable results from our continued focus on margin management. Managing our operating costs, our inventory levels and the profitability of our portfolio will continue to be priorities throughout 2024. We completed the acquisition of American Pacific Corp., AMPAC, on January 16, 2024. We report the financial results of our AMPAC business from the date of acquisition. in our special materials segment. Specialty materials sales were $59 million for the third quarter of 2024 and $114 million for the first 9 months of 2024. Specialty materials operating earnings for the third quarter and the first 9 months of 2024 were 16 million dollars. Special materials results for the third quarter and the first 9 months of 2024 reflect the sale of AMPAC finished goods inventory that we acquired at closing. The acquired inventory was recorded at fair value on the acquisition date and was sold during the first 9 months of 2024, generating no margin. We expect to see a material variation in AMPAC's quarterly results due to the nature of its business, and we anticipate that full year 2024 results will be consistent with our pre-acquisition expectations. Our operations produced strong cash flows during the quarter. We paid dividends of $24 million and funded capital expenditures of $14 million. Since the acquisition of AMPAC, we have made net payments of $259 million on our revolving credit facility. As of September 30, 2024, our net debt-to-EBITDA ratio was 1.4, which is slightly below our target operating range of 1.5 to 2. For 2024, we expect to see capital expenditures in the range of $50 million to $70 million. We want to thank our dedicated employees for their hard work in welcoming and integrating AMPAC into our family of companies. Our team continues to make decisions to promote long-term value for our shareholders and customers and remains focused on our long-term goals. We believe the fundamentals of how we run our business – a long-term vision, a safety-first culture, customer-centric solutions, technology-driven product offerings and world-class supply chain capability – will continue. being beneficial to all our stakeholders. Thank you for joining me on today's call. Kelly, that concludes our planned remarks. We are available for questions by email or phone. So feel free to contact me directly. Thank you all again and we will talk to you next quarter.

Operator:

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