Headline: NewMarket Corporation Unveils Q3 2024 Financial Results

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Headline: NewMarket Corporation Unveils Q3 2024 Financial Results

NewMarket Corporation (NEU) announced its financial results for the third quarter of 2024. The company's net income rose to $132 million or $13.79 per share, compared to $111 million or $11.60 per share in the same period last year. Although sales of petroleum additives saw a slight decrease to $663 million in the third quarter of 2024 from $664 million in 2023, the company reported an increase in operating profit within this segment. This increase was primarily due to lower raw material and operating costs. The recent acquisition of American Pacific Corp. (AMPAC) was integrated into NewMarket's specialty materials segment, achieving sales of $59 million during the quarter.

Key Highlights:

  • NewMarket Corporation reported a net income of $132 million for the third quarter of 2024, up from $111 million in the third quarter of 2023.
  • Earnings per share (EPS) increased to $13.79, compared to $11.60 in the same quarter last year.
  • While petroleum additives sales remained nearly steady at $663 million, the operating profit in this segment rose to $157 million.
  • The acquisition of AMPAC reflected in sales of $59 million within the specialty materials segment for the quarter.
  • NewMarket anticipates changes in quarterly results for AMPAC but expects full-year results to meet pre-acquisition expectations.
  • The company paid $24 million in dividends and made $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 expects capital expenditures for 2024 to range between $50 million and $70 million.
  • The company continues to focus on profit margin management, operating costs, inventory levels, and portfolio profitability.
  • Long-term goals remain a priority, with an emphasis on creating value for shareholders and customers.

Negative Points:

  • There was a slight decrease in petroleum additives sales compared to last year's figures.
  • The specialty materials segment's operating profit does not reflect any margin due to the fair value accounting of acquired AMPAC inventory.

Positive Points:

  • An increase in operating profit in petroleum additives due to lower raw material and operating costs.
  • Strong cash flow was generated during the quarter.
  • Successful integration of AMPAC into NewMarket's operations.

Expectations Not Met:

  • No specific financial expectations mentioned in the earnings release were reported as unmet.

Q&A Highlights:
The company did not hold a Q&A session but remains available for questions via email or phone.

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

InvestingPro Insights:
NewMarket Corporation's (NEU) strong financial performance in the third quarter of 2024 is supported by InvestingPro data. With a trailing twelve-month P/E ratio of 12.58 and an adjusted P/E ratio of 11.55 as of the third quarter of 2024, the stock trades at a relatively attractive valuation compared to its earnings. This aligns with an InvestingPro Tip that notes NEU trades "with a low P/E ratio relative to short-term earnings growth."

The company's commitment to shareholder returns is clearly evidenced by its dividend policy. InvestingPro data shows a current dividend yield of 1.85% and a dividend growth of 11.11% over the past twelve months. An InvestingPro Tip highlights that NewMarket has "increased its dividend for 5 consecutive years," demonstrating the company's financial stability and commitment to delivering 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 as of the third quarter of 2024. This strong profitability is reflected in another InvestingPro Tip, noting the company has been "profitable over the last twelve months."

For investors seeking more comprehensive analyses, 8 additional tips and insights are available on the InvestingPro platform for NewMarket Corporation.