Newmarket Corp (NEU) 10-Q Quarterly Report October 2023

Richmond, VA, October 25, 2023 – NewMarket Corporation (NYSE:NEU) Chairman and Chief Executive Officer, Thomas E. Gottwald, released the following earnings report of the Company’s operations for the third quarter and first nine months of 2023.

Net income for the third quarter of 2023 was $111.2 million, compared to net income of $63.2 million for the third quarter of 2022. Third quarter 2023 earnings per share increased to $11.60, up from $6.32 per share in the same period last year. For the first nine months of 2023, net income was $308.5 million, or $32.05 per share, compared to net income of $189.0 million, or $18.60 per share, for the first nine months of 2022.

Petroleum additives sales for the third quarter of 2023 were $663.7 million, compared to $692.7 million for the same period in 2022. Petroleum additives operating profit for the third quarter of 2023 was $139.8 million, compared to $83.0 million for the third quarter of 2022. The increase in operating profit was mainly due to selling prices, including favorable mix, as well as lower raw material costs, partially offset by lower shipments and higher operating costs. Shipments were down 7.7% between quarterly periods, with decreases in both lubricant additives and fuel additives shipments. When comparing the third quarter of 2023 to the same period in 2022, lubricant additives shipments were down in all regions except North America, while all regions except Europe reported decreases in fuel additives shipments.

Sales for the petroleum additives segment for the first nine months of 2023 were $2.0 billion, compared to $2.1 billion in 2022. Petroleum additives operating profit for the first nine months of 2023 was $404.0 million, compared to $261.1 million for the same period in 2022. The increase in operating profit was a result of selling prices, including favorable mix, partially offset by lower shipments and higher operating costs. Shipments decreased 13.5% when comparing the first nine months of 2023 to the same period in 2022, with decreases in both lubricant additives and fuel additives shipments in all regions except Europe, which reported an increase in fuel additives shipments.

Our shipments have been impacted the last several quarters by the overall global economic weakness and inventory rationalization that is affecting the chemical industry. We continue to be challenged by the ongoing inflationary environment impacting us, including our raw material and operating costs. During this period, we have remained focused on controlling operating costs, continuing our investment in technology, and managing our inventory levels, as well as our customer portfolio.

Overall, we are very pleased with the strong performance of our petroleum additives business during the first nine months of 2023. We continue to operate with low leverage and generated solid cash flows during this period. Our working capital improved by $71.9 million, we paid dividends of $63.5 million, and we made payments of $225.0 million on our revolving credit facility. In addition, we repurchased 119,075 shares of our common stock for $42.9 million. Our Net Debt to EBITDA ratio decreased to 1.1 as of September 30, 2023, a significant improvement over the December 31, 2022 ratio of 2.0.

We continue to make decisions to promote long-term value for our shareholders and customers, and we remain focused on our long-term objectives. We believe the fundamentals of how we run our business - a long-term view, safety-first culture, customer-focused solutions, technology-driven product offerings, and world-class supply chain capability - will continue to be beneficial for all our stakeholders.

The following information was filed by Newmarket Corp (NEU) on Thursday, October 26, 2023 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Newmarket Corp's 10-Q Quarterly Report:

Financial - Shares Highlight
The increase in shareholders' equity primarily reflects our earnings and the impact of foreign currency translation adjustments, partially offset by dividend payments and the repurchases of our common stock.

Financial - Earnings Highlight
When comparing both the third quarter and first nine months of 2023 and 2022, both gross profit and operating profit included the favorable impact of higher selling prices, including favorable mix, partially offset by lower shipments and higher operating costs.
Other - Other Highlight
Both comparison periods included a favorable impact from lower amortization and fees.
Financial - Cash Flow Highlight
Cash Flows, Financial Condition, and Liquidity Cash and cash equivalents at September 30, 2023 were $102.6 million, an increase of $33.8 million since December 31, 2022.
Revenue - Geography Highlight
The decrease in the effective tax rate for both the third quarter and nine months comparisons was primarily caused by a retroactive delay by the U.S. Treasury in the effective date of more stringent foreign tax credit rules, which had been considered in determining the tax rates in prior periods, along with other favorable prior year tax items.
Revenue - Product
Overview When comparing the results...Read more
Financial - Cash Flow
Cash Flows - Operating Activities...Read more
Financial - Expense
SG&A expenses for the first...Read more
Financial - Earnings
Petroleum additives operating profit was...Read more
Revenue - Product
When comparing petroleum additives net...Read more
Financial - Expense
Our SG&A costs are primarily...Read more
Financial - Shares
Outlook Our stated goal is...Read more
Revenue - Product
Comparing the third quarter of...Read more
Other - Other
We expect that our total...Read more
Other - Other
Several jurisdictions in which we...Read more
Financial - Shares
We will continue to evaluate...Read more
Revenue - Product
When comparing the third quarter...Read more
Financial - Earnings
For the first nine months...Read more
Financial - Cash Flow
These cash flows included net...Read more
Financial - Expense
The comparison for both the...Read more
Other - Other
We will continue to invest...Read more
Other - Other
On October 8, 2021, almost...Read more
Financial - Earnings
Petroleum Additives Segment Petroleum additives...Read more
Financial - Expense
While personnel-related costs fluctuate from...Read more
Other - Other
Recent Accounting Pronouncements There have...Read more
Financial - Income
We are continuing to monitor...Read more
Other - Other
Our approach to R&D investments,...Read more
Revenue - Geography
The $71.9 million excluded an...Read more
Other - Other
Capitalized interest had a favorable...Read more
Other - Other
When we use words in...Read more
Other - Other
The effective tax rate was...Read more
Other - Other
The effective tax rate was...Read more
Revenue - Geography
The lower shipments were partially...Read more
Financial - Expense
The most significant changes in...Read more
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The first nine months of...Read more
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The decrease in trade and...Read more
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During this period, we have...Read more
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Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Newmarket Corp provided additional information to their SEC Filing as exhibits

Exhibit 31.A: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.B: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.A: Section 1350 Certification

Exhibit 32.B: Section 1350 Certification

Ticker: NEU
CIK: 1282637
Form Type: 10-Q Quarterly Report
Accession Number: 0001282637-23-000019
Submitted to the SEC: Thu Oct 26 2023 9:09:43 AM EST
Accepted by the SEC: Thu Oct 26 2023
Period: Saturday, September 30, 2023
Industry: Industrial Organic Chemicals