Earnings Results under Review: NewMarket Corporation (NYSE: NEU)

29

RICHMOND, Va., January 18, 2020 – Shares of NewMarket Corporation (NYSE: NEU) lost -0.28% to $468.88. The stock traded total volume of 744 shares lower than the average volume of 43.71K shares.

For the third quarter of 2019, NewMarket Corporation (NEU) reported net income of $67.80M, compared to net income of $58.50M for the third quarter of 2018. Earnings per share increased to $6.06 per share from $5.12 per share in the prior year period. For the first nine months of 2019, net income was $204.20M, or $18.26 per share, compared to net income of $171.90M, or $14.78 per share, for the first nine months of last year.

Sales for the petroleum additives segment for the third quarter of 2019 were $550.60M, compared to sales in the third quarter of 2018 of $560.50M. This decrease was due mainly to lower shipments partially offset by increased selling prices. Petroleum additives operating profit for the third quarter of 2019 was $94.80M, compared to $75.80M for the same period last year. The increase was primarily due to lower raw material and conversion costs, partially offset by lower shipments. Shipments decreased 1.6% between the periods, mainly due to decreases in lubricant additive shipments, with Asia Pacific and Latin America being the primary drivers for the decrease.

Petroleum additives sales for the first nine months of the year were $1.60B, compared to sales in the first nine months of last year of $1.70B. This decrease was due mainly to lower shipments and changes in foreign currency rates, partially offset by increased selling prices. Petroleum additives operating profit for the first nine months of the year was $285.60M compared to $231.50M for the first nine months of 2018. The increase was mainly due to changes in selling prices, lower selling, general and administrative expenses, and lower raw material and conversion costs, partially offset by lower shipments. Shipments decreased 7.6% between periods, with decreases in both lubricant additives and fuel additives shipments across all regions except Asia Pacific, which reported an increase in fuel additives shipments. While shipments have been lower in recent quarters as compared to prior years, we have started to see evidence that this trend is beginning to stabilize.

During the first nine months of 2019, we funded capital expenditures of $37.10M, paid dividends of $60.40M, and repaid $126.30M of borrowings on our revolving credit facility.

NEU has the market capitalization of $5.29B and its EPS growth ratio for the past five years was 1.70%. The return on assets ratio of the Company was 15.20% while its return on investment ratio stands at 18.30%. Price to sales ratio was 2.41 while 55.20% of the stock was owned by institutional investors.