NewMarket Q2 2025 Earnings Report

NewMarket EPS Results

• Actual EPS: $11.84
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

NewMarket Revenue Results

• Actual Revenue: $698.51 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

NewMarket Announcement Details

• Quarter: Q2 2025
• Date: 7/30/2025
• Time: After Market Closes
• Conference Call Date: Thursday, July 31, 2025
• Conference Call Time: 3:00PM ET

NewMarket (NYSE:NEU) (NYSE: NEU) is a holding company that develops, manufactures and supplies specialty chemicals, primarily for the petroleum and related industries. Its products are designed to improve the performance, efficiency and durability of fuels, lubricants and other petroleum-based products.

NewMarket operates through its principal subsidiaries, including Afton Chemical Corporation and Ethyl Corporation. Afton Chemical develops and produces fuel and lubricant additives used in automotive, marine, aviation, commercial and industrial applications. Ethyl Corporation supplies fuel additives and related technologies, including products used to enhance fuel performance and meet evolving fuel specifications.

Headquartered in Richmond, Virginia, NewMarket serves customers in North America and international markets through manufacturing, research and technical service operations. The company traces its history to the late 19th century and has evolved from its origins in the fuel-additives industry into a global specialty-chemicals business focused on transportation and industrial applications.

NewMarket Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q2 net income was $111 million (or $11.84 per share), while six-month net income reached a record $237 million ($25.11 per share), lifting EPS year-over-year.
• Negative Sentiment: Petroleum additives Q2 sales declined to $654 million (from $670 million) and operating profit fell to $140 million due to a 2.5% shipment drop and higher R&D spending.
• Positive Sentiment: The Specialty Materials segment delivered Q2 sales of $42 million (up from $38 million) and operating profit of $11 million (vs. $5 million), driven by volume gains.
• Positive Sentiment: The company generated robust cash flows, returned $129 million to shareholders via $77 million in share repurchases and $52 million in dividends, and lowered net debt/EBITDA to 1.0x from 1.2x.
• Negative Sentiment: Ongoing inflationary pressures and tariffs continue to challenge operating margins despite efficiency and cost management efforts.

Presentation

[Operator]

Good day, everyone, and welcome to the NewMarket Corporation conference call and webcast to review second quarter 2025 financial results. At this time, all participants are on a listen-only mode. It is now my pleasure to turn the floor over to your host, Tim Fitzgerald. Sir, the floor is yours.

[Timothy Fitzgerald, CEO at NewMarket Corporation]

Thank you, Matt, and thanks to everyone for joining me this afternoon. As a reminder, some of the statements made during this conference call may be forward-looking. Relevant factors that could cause actual results to differ materially from those forward-looking statements are contained in our earnings release and in our SEC filings, including our most recent Form 10-K. During this call, we will also discuss the non-GAAP financial measures included in our earnings release. The earnings release, which can be found on our website, includes a reconciliation of non-GAAP financial measures to the comparable GAAP financial measures. We filed our 10-Q for the second quarter of 2025 earlier today, and it contains significantly more details on the operations and performance of our company. Today, I will be referring to the data that was included in last night's press release.

[Timothy Fitzgerald, CEO at NewMarket Corporation]

Net income for the second quarter of 2025 was $111 million, or $11.84 per share, compared to net income of $112 million, or $11.63 per share for the second quarter of 2024. Net income for the first half of 2025 was a record $237 million, or $25.11 per share, compared to net income of $219 million, or $22.87 per share for the first half of 2024. Petroleum additives sales for the second quarter of 2025 were $654 million, compared to $670 million for the same period in 2024. Petroleum additives operating profit for the second quarter of 2025 was $140 million, compared to $148 million for the second quarter of 2024. The decrease in operating profit compared to prior year was mainly due to a 2.5% decline in shipments, along with an increase in research and development investments to support our customers' needs.

[Timothy Fitzgerald, CEO at NewMarket Corporation]

For the first half of 2025, sales for the petroleum additives segment were $1.3 billion, essentially flat compared to the same period in 2024. Petroleum additives operating profit for the first half of 2025 was $282 million, compared to $299 million for 2024. The drivers for the decrease in operating profit were consistent with those affecting the second quarter comparison. Shipments were down by 4.9% when comparing the first half of 2025 with the same period in 2024. We are very pleased with the performance of our petroleum additives business during the first half of 2025. Our team's focus on enhancing efficiency has resulted in strong operating profit margins this year. However, we remain challenged by the ongoing inflationary environment and the impact of tariffs, despite our efforts to improve efficiency and manage our operating costs.

[Timothy Fitzgerald, CEO at NewMarket Corporation]

We continue to focus on investing in technology to meet customer needs, optimizing our inventory levels, and improving our portfolio profitability. We report the financial results of our AMPAC business and our specialty materials segment. Specialty materials sales for the second quarter of 2025 were $42 million, compared to $38 million for the same period in 2024. Specialty materials operating profit for the second quarter of 2025 was $11 million, compared to $5 million for the second quarter of 2024. The increase in operating profit was mainly due to an increase in volume within the quarter. As previously stated, we will see substantial variation in quarterly results for the specialty materials segment on an ongoing basis due to the nature of the business. For the first half of 2025, sales for the specialty materials segment were $96 million, compared to $55 million for the same period in 2024.

[Timothy Fitzgerald, CEO at NewMarket Corporation]

Specialty materials operating profit for the first half of 2025 was $34 million, compared to slightly above break-even for the first half of 2024. We view AMPAC as a strategic national asset with a mission-critical role in global safety, security, and space programs. As we announced in April of this year, we are committed to investing in additional capacity at AMPAC to meet our customers' growing needs while adding additional redundancy and security of supply into our production systems. Our company generated solid cash flows throughout the first half of 2025, which allowed us to return $129 million to our shareholders through share repurchases of $77 million and dividends of $52 million. The share repurchases include $20 million that was completed in the second quarter of 2025.

[Timothy Fitzgerald, CEO at NewMarket Corporation]

As of June 30, 2025, our net debt-to-EBITDA ratio is 1.0, which is an improvement over the 1.2x we reported at the end of 2024. As we look ahead to the second half of 2025 and beyond, we anticipate continued strength in our petroleum additives and specialty materials segment. We are committed to making decisions that promote long-term value for our shareholders and customers while staying focused on our long-term objectives. We believe that the core principles guiding our business—a long-term perspective, a safety-first culture, customer-focused solutions, technology-driven products, and a world-class supply chain—will continue to benefit all of our stakeholders. Matt, that concludes our planned comments. We are available for questions via email or by phone, so please feel free to contact me directly. Thank you all again, and we will talk to you next quarter.

[Operator]

Thank you. Everyone, this concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.

Participants

Executives

• Timothy Fitzgerald, CEO