NewMarket Company (NEU) has introduced its monetary outcomes for the third quarter of 2024, with a internet earnings of $132 million, or $13.79 per share, a rise from the earlier yr’s $111 million, or $11.60 per share. Regardless of a slight lower in petroleum components gross sales from $664 million in Q3 2023 to $663 million in Q3 2024, the corporate noticed a rise in working revenue on this phase, primarily on account of diminished uncooked materials and working prices. The current acquisition of American Pacific Corp. (AMPAC) has been built-in into NewMarket’s specialty supplies phase, contributing $59 million in gross sales for the quarter.
Key Takeaways
- NewMarket Company studies a internet earnings of $132 million for Q3 2024, up from $111 million in Q3 2023.
- Earnings per share (EPS) rose to $13.79, in comparison with $11.60 in the identical quarter final yr.
- Petroleum components gross sales have been almost flat at $663 million, whereas working revenue on this phase elevated to $157 million.
- The acquisition of AMPAC is mirrored within the specialty supplies phase, with gross sales of $59 million for the quarter.
- NewMarket anticipates variations in quarterly outcomes for AMPAC however expects full-year outcomes to satisfy preacquisition expectations.
- The corporate paid dividends of $24 million and invested $14 million in capital expenditures in the course of the quarter.
- Internet debt-to-EBITDA ratio stood at 1.4, under the goal vary of 1.5 to 2.
Firm Outlook
- NewMarket anticipates capital expenditures to be between $50 million and $70 million for the complete yr of 2024.
- The corporate maintains a concentrate on margin administration and working price, stock ranges, and portfolio profitability.
- Lengthy-term targets proceed to be a precedence, with a concentrate on creating worth for shareholders and clients.
Bearish Highlights
- Petroleum components gross sales noticed a minor decline from the earlier yr’s figures.
- The specialty supplies phase’s working revenue displays no margin because of the sale of acquired AMPAC stock recorded at truthful worth.
Bullish Highlights
- Elevated petroleum components working revenue on account of decrease uncooked materials and working prices.
- Sturdy money circulation era in the course of the quarter.
- Profitable integration of AMPAC into NewMarket’s operations.
Misses
- There have been no particular monetary misses reported within the earnings name.
Q&A Highlights
- The corporate didn’t maintain a question-and-answer session however is out there for questions through e-mail or cellphone.
NewMarket Company’s third-quarter outcomes exhibit a strong monetary efficiency with elevated internet earnings and working income within the petroleum components phase. The acquisition of AMPAC has expanded the corporate’s specialty supplies portfolio, though it has but to contribute to revenue margins because of the truthful worth accounting of the acquired stock. NewMarket’s strategic concentrate on price administration and long-term progress, together with its sturdy money circulation and prudent debt administration, positions it to proceed its dedication to delivering worth to stakeholders. The corporate’s executives stay obtainable for additional inquiries from events.
InvestingPro Insights
NewMarket Company’s (NEU) robust monetary efficiency in Q3 2024 is additional supported by information from InvestingPro. The corporate’s P/E ratio of 12.58 and adjusted P/E ratio of 11.55 for the final twelve months as of Q3 2024 point out that the inventory is buying and selling at a comparatively engaging valuation in comparison with its earnings. This aligns with an InvestingPro Tip suggesting that NEU is “Buying and selling at a low P/E ratio relative to near-term earnings progress.”
The corporate’s dedication to shareholder returns is obvious in its dividend coverage. InvestingPro information reveals a present dividend yield of 1.85% and a dividend progress of 11.11% over the past twelve months. An InvestingPro Tip highlights that NewMarket “Has raised its dividend for five consecutive years,” which underscores the corporate’s monetary stability and dedication to returning worth to shareholders.
NewMarket’s profitability can be noteworthy, with a gross revenue margin of 30.84% and an working earnings margin of 20.68% for the final twelve months as of Q3 2024. This robust profitability is mirrored in one other InvestingPro Tip stating that the corporate has been “Worthwhile over the past twelve months.”
For traders looking for extra complete evaluation, InvestingPro presents extra ideas and insights, with 8 extra ideas obtainable for NewMarket Company on the platform.
Full transcript – NewMarket Corp (NEU) Q3 2024:
Operator: Good day, and welcome to the NewMarket Company’s scheduled convention name and webcast to evaluation the Third Quarter 2024 Monetary Outcomes. Right now, all members are in a listen-only mode. I might now like to show the decision over to your host, Invoice Skrobacz. Ground is yours.
Invoice Skrobacz: Thanks, Kelly, and due to everybody for becoming a member of me this afternoon. As a reminder, a few of the statements made throughout this convention name could also be forward-looking. Related components that would trigger precise outcomes to vary materially from these forward-looking statements are contained in our earnings launch and in our SEC filings, together with our most up-to-date Kind 10-Ok. Throughout this name, I may even focus on the non-GAAP monetary measures included in our earnings launch. The earnings launch, which could be discovered on our web site, features a reconciliation of the non-GAAP monetary measures to the comparable GAAP monetary measures. We filed our 10-Q this morning. It accommodates considerably extra particulars on the operations and efficiency of our firm. Please take time to evaluation it. I will likely be referring to the information that was included in final night time’s earnings launch. Internet earnings for the third quarter of 2024 was $132 million, or $13.79 per share, in comparison with internet earnings of $111 million, or $11.60 per share, for a similar interval final yr. Petroleum components gross sales for the third quarter of 2024 have been $663 million in comparison with $664 million for a similar interval in 2023. Petroleum components working revenue for the third quarter of 2024 was $157 million in comparison with $140 million for the third quarter of 2023. The rise in petroleum components working revenue was primarily on account of decrease uncooked materials and working prices, partially offset by decrease promoting costs. We stay happy with the robust efficiency of our petroleum components enterprise in the course of the first 9 months of 2024. We proceed to see the favorable outcomes of our ongoing concentrate on margin administration. Managing our working price, our stock ranges and our portfolio profitability will stay priorities all through 2024. We accomplished the acquisition of American Pacific Corp., AMPAC, on January 16, 2024. We report the monetary outcomes of our AMPAC enterprise because the date of acquisition in our specialty supplies phase. Specialty supplies gross sales have been $59 million for the third quarter of 2024 and $114 million for the primary 9 months of 2024. Specialty Supplies working revenue for the third quarter and first 9 months of 2024 have been $16 million. The specialty supplies third quarter and first 9 months 2024 outcomes replicate the sale of AMPAC completed items stock that we acquired at closing. The acquired stock was recorded at truthful worth on the acquisition date and was offered in the course of the first 9 months of 2024, producing no margin. We count on to see substantial variation in quarterly outcomes for AMPAC because of the nature of its enterprise, and we anticipate full yr 2024 outcomes to be per our preacquisition expectations. Our operations produced robust money flows in the course of the quarter. We paid dividends of $24 million and funded capital expenditures of $14 million. Because the AMPAC acquisition, we’ve made internet funds of $259 million on our revolving credit score facility. As of September 30, 2024, our internet debt-to-EBITDA ratio was 1.4, which is barely under our goal working vary of 1.5 to 2. For 2024, we count on to see capital expenditures within the $50 million to $70 million vary. We wish to thank our devoted staff for his or her exhausting work in welcoming and integrating AMPAC into our household of corporations. Our crew continues to make selections to advertise long-term worth for our shareholders and clients and stay targeted on our long-term targets. We imagine the basics of how we run our enterprise, a long-term view, safety-first tradition, customer-focused options, technology-driven product choices and world-class provide chain functionality, will proceed to be useful for all our stakeholders. Thanks for becoming a member of me for the decision at the moment. Kelly, that concludes our deliberate feedback. We can be found for questions through e-mail or by cellphone. So please be at liberty to contact me straight. Thanks all once more, and we’ll speak to you subsequent quarter.
Operator:
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