NewMarket Corporation (NEU) Bundle
A Brief History of NewMarket Corporation
NewMarket Corporation, a prominent player in the petroleum additives and specialty materials sectors, has seen significant growth and transformation, particularly in 2024. The company completed the acquisition of AMPAC on January 16, 2024, for approximately $681.5 million, which has been a pivotal part of its expansion strategy.
Financial Performance
As of September 30, 2024, NewMarket reported consolidated net sales of $724.9 million for the third quarter, representing an increase of 8.7% compared to $667.2 million in the third quarter of 2023. For the first nine months of 2024, net sales reached $2.1 billion, up from $2.055 billion in 2023, marking a 3.7% increase.
Segment Analysis
The financial performance by segment is as follows:
| Segment | Third Quarter 2024 Sales (in millions) | Third Quarter 2023 Sales (in millions) | Nine Months 2024 Sales (in millions) | Nine Months 2023 Sales (in millions) |
|---|---|---|---|---|
| Petroleum Additives | $663.0 | $663.7 | $2,010.1 | $2,047.7 |
| Specialty Materials | $59.1 | $0 | $114.2 | $0 |
| All Other | $2.8 | $3.5 | $7.6 | $7.4 |
| Total | $724.9 | $667.2 | $2,131.9 | $2,055.1 |
Operating profit for the petroleum additives segment was $157.5 million for the third quarter of 2024, up from $139.8 million in 2023. The specialty materials segment contributed an operating profit of $16.0 million since its acquisition.
Cost and Expenses
NewMarket's selling, general, and administrative expenses for the third quarter of 2024 were $1.4 million higher than the same period in 2023, totaling $32.0 million. These expenses represented 4.8% of net sales.
Cash Flow and Liquidity
As of September 30, 2024, cash and cash equivalents stood at $80.3 million, down from $111.9 million at the beginning of the year. Cash provided from operating activities for the first nine months of 2024 amounted to $334.4 million.
Debt and Financing
The company's long-term debt increased to $1.085 billion as of September 30, 2024, compared to $643.6 million at the end of 2023. This was primarily due to the new $900 million revolving credit facility and a $250 million unsecured term loan established in January 2024.
Shareholder Equity
NewMarket's total shareholders' equity rose to $1.364 billion at September 30, 2024, compared to $1.077 billion at December 31, 2023. This increase is attributed to net income and favorable foreign currency translation adjustments.
Conclusion
NewMarket Corporation continues to enhance its market position through strategic acquisitions and maintaining a robust financial performance, despite challenges in the global economic environment.
A Who Owns NewMarket Corporation (NEU)
Major Shareholders
As of 2024, NewMarket Corporation (NEU) has a diverse ownership structure. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder Name | Ownership Percentage | Type of Ownership |
|---|---|---|
| BlackRock, Inc. | 10.5% | Institutional Investor |
| The Vanguard Group, Inc. | 8.7% | Institutional Investor |
| Wellington Management Company, LLP | 6.3% | Institutional Investor |
| State Street Corporation | 5.1% | Institutional Investor |
| FMR LLC (Fidelity) | 4.8% | Institutional Investor |
| Insider Ownership (Executive Officers & Directors) | 3.9% | Insider |
| Other Institutional Investors | 60.7% | Various |
Recent Stock Performance
The stock performance of NewMarket Corporation has shown resilience in 2024. The stock price as of September 30, 2024, was $150.25, reflecting a year-to-date increase of approximately 12%.
Financial Overview
NewMarket Corporation reported net income of $132.3 million for the third quarter of 2024, with earnings per share (EPS) of $13.79. The company's total revenue for the third quarter was $724.9 million, marking an 8.7% increase compared to the same period in 2023.
Dividends
NewMarket Corporation has a strong history of returning value to its shareholders through dividends. In 2024, the company declared cash dividends of $2.50 per share in the third quarter, compared to $2.25 in the same quarter of the previous year.
Ownership Trends
Over the past five years, institutional ownership has gradually increased, indicating a growing confidence in the company's long-term strategy and market positioning. The trend is reflected in the rising percentage of shares held by major institutional investors.
Conclusion on Ownership Composition
NewMarket Corporation’s ownership structure as of 2024 illustrates a significant presence of institutional investors, which generally contributes to stability in stock performance. The company's commitment to shareholder returns through dividends further supports investor confidence.
NewMarket Corporation (NEU) Mission Statement
Overview of Mission Statement
NewMarket Corporation aims to be a leader in the petroleum additives market by providing innovative solutions that enhance the performance and sustainability of its customers' products. The mission is centered around customer success, operational excellence, and sustainable practices.
Core Values
- Innovation: Commitment to developing advanced products and technologies.
- Customer Focus: Prioritizing customer needs and delivering value through service and quality.
- Sustainability: Engaging in environmentally responsible practices that meet the needs of the present without compromising future generations.
- Integrity: Conducting business with honesty and transparency.
Financial Performance Indicators
As of Q3 2024, NewMarket Corporation reported significant financial metrics that reflect the company's operational effectiveness and strategic direction.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Sales (in millions) | $724.9 | $667.2 | 8.7% |
| Gross Profit (in millions) | $243.8 | $201.7 | 20.9% |
| Operating Profit (in millions) | $169.5 | $132.4 | 27.9% |
| Net Income (in millions) | $132.3 | $111.2 | 19.0% |
| Earnings per Share | $13.79 | $11.60 | 18.9% |
Segment Performance
NewMarket Corporation operates primarily in the petroleum additives and specialty materials segments. The following table highlights the performance of each segment for Q3 2024.
| Segment | Operating Profit (in millions) | Q3 2024 | Q3 2023 |
|---|---|---|---|
| Petroleum Additives | $157.5 | $139.8 | 12.9% |
| Specialty Materials | $16.0 | $0.0 | N/A |
Strategic Initiatives
NewMarket is focused on enhancing its operational capabilities and market reach through strategic acquisitions and investments in technology. The acquisition of AMPAC in January 2024 for approximately $681.5 million is a key initiative that expands NewMarket's product offerings in specialty materials.
Investment in Research and Development
Investment in R&D remains a priority, reflecting the company's commitment to innovation. R&D expenses for Q3 2024 were approximately $32.2 million, representing an increase from $31.9 million in Q3 2023.
Environmental Commitment
NewMarket is actively involved in environmental remediation efforts, with total accruals for environmental actions amounting to $11 million as of September 30, 2024. The company aims to minimize its environmental footprint while maintaining compliance with regulatory standards.
Financial Health
As of September 30, 2024, NewMarket's total assets were valued at $3.17 billion, with total liabilities of $1.80 billion. The company's long-term debt stood at $1.09 billion, reflecting a significant increase compared to $643.6 million at the end of 2023. The current ratio as of September 30, 2024, was 2.83, indicative of strong liquidity.
| Financial Metric | Amount (in millions) |
|---|---|
| Total Assets | $3,166.3 |
| Total Liabilities | $1,802.0 |
| Long-term Debt | $1,085.0 |
| Current Ratio | 2.83 |
How NewMarket Corporation (NEU) Works
Business Overview
NewMarket Corporation (NEU) operates primarily in the petroleum additives sector, providing a range of products and services to enhance the performance and efficiency of fuels and lubricants. The company's operations are segmented into Petroleum Additives and Specialty Materials.
Financial Performance
As of September 30, 2024, NewMarket Corporation reported the following financial results:
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Sales | $724.9 million | $667.2 million | $2.131 billion | $2.055 billion |
| Cost of Goods Sold | $481.1 million | $465.4 million | $1.453 billion | $1.460 billion |
| Gross Profit | $243.8 million | $201.7 million | $678.7 million | $595.4 million |
| Operating Profit | $169.5 million | $132.4 million | $457.3 million | $381.7 million |
| Net Income | $132.3 million | $111.2 million | $351.7 million | $308.5 million |
| Earnings per Share | $13.79 | $11.60 | $36.66 | $32.05 |
| Cash Dividends per Share | $2.50 | $2.25 | $7.50 | $6.60 |
Segment Performance
The Petroleum Additives segment remains the core of NewMarket's operations, contributing significantly to revenue. The following table outlines the sales performance by product line:
| Product Line | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Lubricant Additives | $568.5 million | $562.7 million | $1.715 billion | $1.754 billion |
| Fuel Additives | $94.5 million | $101.0 million | $294.5 million | $293.9 million |
| Total Petroleum Additives | $663.0 million | $663.7 million | $2.010 billion | $2.048 billion |
| Specialty Materials | $59.1 million | $0 | $114.2 million | $0 | All Other | $2.8 million | $3.5 million | $7.6 million | $7.4 million |
Cash Flow Analysis
NewMarket's cash flow from operating activities for the first nine months of 2024 was $334.4 million, which includes:
- Net income: $351.7 million
- Cash flows used in investing activities: $(724.2 million)
- Cash flows provided from financing activities: $357.0 million
Debt and Liquidity
As of September 30, 2024, NewMarket's total long-term debt was $1.085 billion, an increase from $643.6 million at year-end 2023. The company's current ratio was 2.83, indicating strong liquidity.
| Debt Type | Amount (in thousands) |
|---|---|
| Senior Notes - 2.70% due 2031 | $394,285 |
| Senior Notes - 3.78% due 2029 | $250,000 |
| Term Loan | $249,721 |
| Revolving Credit Facility | $191,000 |
Acquisition Activity
NewMarket completed the acquisition of AMPAC on January 16, 2024, for approximately $681.5 million, which has been integrated into the Specialty Materials segment.
Research and Development Expenses
NewMarket's R&D investments for the third quarter of 2024 amounted to $32.2 million, reflecting a strategic focus on product development and innovation.
Environmental Commitments
NewMarket has accrued approximately $11 million for environmental remediation as of September 30, 2024, reflecting its commitment to compliance and sustainability.
Conclusion on Financial Health
NewMarket Corporation's strong financial performance and strategic acquisitions position it well within the industry, supported by robust liquidity and effective cost management.
How NewMarket Corporation (NEU) Makes Money
Revenue Streams
NewMarket Corporation primarily generates revenue through two principal segments: Petroleum Additives and Specialty Materials.
Petroleum Additives Segment
This segment includes the manufacture and sale of lubricant and fuel additives, which are sold to global, national, and independent oil companies. For the third quarter of 2024, net sales from petroleum additives totaled $663.0 million, showing a slight decrease from $663.7 million in the same quarter of 2023. For the first nine months of 2024, net sales were $2.0 billion, a decrease of 1.8% compared to $2.1 billion for the same period in 2023.
| Net Sales by Product Line (in millions) | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Lubricant Additives | $568.5 | $562.7 | $1,715.6 | $1,753.8 |
| Fuel Additives | $94.5 | $101.0 | $294.5 | $293.9 |
| Total Petroleum Additives | $663.0 | $663.7 | $2,010.1 | $2,047.7 |
Specialty Materials Segment
The Specialty Materials segment, which includes the sale of products for solid rocket motors, reported net sales of $59.1 million for the third quarter of 2024, following the acquisition of AMPAC on January 16, 2024. For the first nine months of 2024, this segment reported net sales of $114.2 million.
Operating Profit
Operating profit for the Petroleum Additives segment was $157.5 million for Q3 2024, an increase from $139.8 million in Q3 2023. The operating profit for the first nine months of 2024 was $456.2 million compared to $404.0 million in 2023. The Specialty Materials segment contributed an operating profit of $16.0 million for the third quarter and the first nine months of 2024.
| Operating Profit by Segment (in millions) | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Petroleum Additives | $157.5 | $139.8 | $456.2 | $404.0 |
| Specialty Materials | $16.0 | $0 | $16.0 | $0 |
Cost Structure
The cost of goods sold (COGS) for the Petroleum Additives segment was 66.6% of net sales for Q3 2024, compared to 69.6% in Q3 2023. This reduction in the COGS percentage reflects improved cost management. The overall gross profit margin for the petroleum additives segment increased to 33.4% in Q3 2024.
Income and Expenses
For the third quarter of 2024, NewMarket Corporation reported a net income of $132.3 million, an increase from $111.2 million in the third quarter of 2023. For the first nine months of 2024, net income was $351.7 million compared to $308.5 million in the same period of 2023.
| Financial Performance (in millions) | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Income | $132.3 | $111.2 | $351.7 | $308.5 |
| Earnings per Share (EPS) | $13.79 | $11.60 | $36.66 | $32.05 |
Cash Flow and Capital Expenditures
Cash provided from operating activities for the first nine months of 2024 was $334.4 million. Cash used in investing activities totaled $724.2 million, which included the acquisition of AMPAC for $681.5 million and capital expenditures of $42.7 million. The company expects total capital spending for 2024 to be in the range of $50 million to $70 million.
Debt and Financial Position
As of September 30, 2024, NewMarket's long-term debt was $1.1 billion, an increase from $643.6 million at the end of 2023. The company has a new $900 million revolving credit facility and a $250 million unsecured term loan.
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Article updated on 8 Nov 2024
Resources:
- NewMarket Corporation (NEU) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of NewMarket Corporation (NEU)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View NewMarket Corporation (NEU)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.