NewMarket Corp (NEU) Reports Q3 and Nine Months 2023 Earnings
Q3 net income of $111.2 million, up from $63.2 million in Q3 2022
Earnings per share for Q3 2023 increased to $11.60, up from $6.32 in Q3 2022
Nine-month petroleum additives operating profit of $404.0 million
Year-to-date working capital improvement of $71.9 million
On October 26, 2023, NewMarket Corp (NYSE:NEU) released its earnings report for the third quarter and first nine months of 2023. The company reported a net income of $111.2 million for Q3 2023, a significant increase from the $63.2 million net income reported for the same period in 2022. Earnings per share for Q3 2023 also increased to $11.60, up from $6.32 per share in Q3 2022. For the first nine months of 2023, the company reported a net income of $308.5 million, or $32.05 per share, compared to a net income of $189.0 million, or $18.60 per share, for the same period in 2022.
Financial Performance
Petroleum additives sales for Q3 2023 were $663.7 million, compared to $692.7 million for the same period in 2022. The petroleum additives operating profit for Q3 2023 was $139.8 million, compared to $83.0 million for Q3 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.
For the first nine months of 2023, petroleum additives sales were $2.0 billion, compared to $2.1 billion in 2022. The 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.
Company's Outlook
Despite the challenges posed by the ongoing inflationary environment impacting raw material and operating costs, NewMarket Corp (NYSE:NEU) remains focused on controlling operating costs, continuing investment in technology, and managing inventory levels. The company's working capital improved by $71.9 million, and it made payments of $225.0 million on its revolving credit facility. The company also repurchased 119,075 shares of its common stock for $42.9 million. The 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.
Financial Tables
According to the consolidated balance sheet, as of September 30, 2023, NewMarket Corp (NYSE:NEU) had total assets of $2.29 billion, with total liabilities of $1.32 billion and total shareholders' equity of $971.94 million. The company's net sales for the third quarter ended September 30, 2023, were $667.15 million, with a net income of $111.25 million. For the nine months ended September 30, 2023, net sales were $2.06 billion, with a net income of $308.45 million.
The company's earnings before interest, depreciation, and amortization (EBITDA) for the third quarter ended September 30, 2023, was $160.46 million. For the nine months ended September 30, 2023, EBITDA was $471.21 million. The Net Debt to EBITDA ratio was 1.1 as of September 30, 2023.
Explore the complete 8-K earnings release (here) from NewMarket Corp for further details.
This article first appeared on GuruFocus.
