Q3 2026 NewMarket Corp Earnings Call
Operator: Greetings, and welcome to the NewMarket Corporation scheduled conference call and webcast to review the Q3 2026 financial results. At this time, all participants are on a listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference call is being recorded. I will now turn the call over to NewMarket Corporation management. Burr?
Operator: Greetings, and welcome to the NewMarket Corporation scheduled conference call and webcast to review the Q3 2026 financial results. At this time, all participants are on a listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference call is being recorded. I will now turn the call over to NewMarket Corporation management. Burr?
Speaker #1: NewMarket Corp has scheduled a conference call and webcast to review the third quarter 2026 financial results. At this time, all participants are on listen-only mode. If anyone requires operator assistance during the conference, please press *0 on your telephone keypad.
Speaker #1: And please note, this conference call is being recorded. I will now turn the call over to NewMarket Corp management, Mr.
[Company Representative] (NewMarket Corporation): Thank you, 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 the non-GAAP financial measures to the comparable GAAP financial measures. We filed our 10-Q for the Q3 2026 today, and it contains significantly more details on the operations and performance of our company.
Tim Fitzgerald: Thank you, 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 the non-GAAP financial measures to the comparable GAAP financial measures. We filed our 10-Q for the Q3 2026 today, and it contains significantly more details on the operations and performance of our company.
Speaker #2: Thank you, 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.
Speaker #2: 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.
Speaker #2: 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 the non-GAAP financial measures to the comparable GAAP financial measures.
Speaker #2: We filed our 10-Q for the third quarter of 2026 today, and it contains significantly more details on the operations and performance of our company.
[Company Representative] (NewMarket Corporation): Today, I will be referring to the data that was included in yesterday's press release. Net income for Q3 2026 was $124 million, or $13.50 per share, compared to net income of $100 million, or $10.67 per share for Q3 2025. Net income for the first nine months of 2026 was $376 million, or $40.64 per share, compared to net income of $337 million, or $35.78 per share for the same period in 2025. Higher operating profit and a reduced effective tax rate were the primary drivers behind the increase in net income for both Q3 and the first nine months of 2026. Petroleum additive sales for Q3 2026 were $651 million, compared to $649 million for the same period in 2025.
Tim Fitzgerald: Today, I will be referring to the data that was included in yesterday's press release. Net income for Q3 2026 was $124 million, or $13.50 per share, compared to net income of $100 million, or $10.67 per share for Q3 2025. Net income for the first nine months of 2026 was $376 million, or $40.64 per share, compared to net income of $337 million, or $35.78 per share for the same period in 2025. Higher operating profit and a reduced effective tax rate were the primary drivers behind the increase in net income for both Q3 and the first nine months of 2026. Petroleum additive sales for Q3 2026 were $651 million, compared to $649 million for the same period in 2025.
Speaker #2: Today, I will be referring to the data that was included in yesterday's press release. Net income for the third quarter of 2026 was $124 million, or $13.50 per share, compared to net income of $100 million, or $10.67 per share, for the third quarter of 2025.
Speaker #2: Net income for the first nine months of 2026 was $376 million, or $40.64 per share, compared to net income of $337 million, or $35.78 per share, for the same period in 2025.
Speaker #2: Higher operating profit and a reduced effective tax rate were the primary drivers behind the increase in net income for both the third quarter and the first nine months of 2026.
Speaker #2: Petroleum additive sales for the third quarter of 2026 were $651 million, compared to $649 million for the same period in 2025. Petroleum additive's operating profit for the third quarter of 2026 was $131 million, essentially flat compared to the third quarter of 2025.
[Company Representative] (NewMarket Corporation): Petroleum additives operating profit for Q3 2026 was $131 million, essentially flat compared to Q3 2025. Despite the broader market softness in lubricant additives that resulted in an 8% decline in shipments, we successfully implemented surcharges to offset higher costs incurred due to the supply chain disruptions in the Middle East. Petroleum additive sales were $1.9 billion for both the first nine months of 2026 and 2025. Petroleum additives operating profit for the first nine months of 2026 was $415 million, compared to $413 million in 2025. Shipments were down 6% for the first nine months compared to the prior year period, reflecting both the H1 impact of our strategic decision to reduce low-margin business and the current market softness. We are pleased with the performance of our petroleum additives business during the first nine months of 2026.
Tim Fitzgerald: Petroleum additives operating profit for Q3 2026 was $131 million, essentially flat compared to Q3 2025. Despite the broader market softness in lubricant additives that resulted in an 8% decline in shipments, we successfully implemented surcharges to offset higher costs incurred due to the supply chain disruptions in the Middle East. Petroleum additive sales were $1.9 billion for both the first nine months of 2026 and 2025. Petroleum additives operating profit for the first nine months of 2026 was $415 million, compared to $413 million in 2025. Shipments were down 6% for the first nine months compared to the prior year period, reflecting both the H1 impact of our strategic decision to reduce low-margin business and the current market softness. We are pleased with the performance of our petroleum additives business during the first nine months of 2026.
Speaker #2: Despite the broader market softness in lubricant additives that resulted in an 8% decline in shipments, we successfully implemented surcharges to offset higher costs incurred due to the supply chain disruptions in the Middle East.
Speaker #2: Petroleum additive sales were $1.9 billion for both the first nine months of 2026 and 2025. Petroleum additive’s operating profit for the first nine months of 2026 was $415 million, compared to $413 million in 2025.
Speaker #2: Shipments were down 6% for the first nine months compared to the prior year period, reflecting both the first-half impact of our strategic decision to reduce low-margin business and the current market softness.
Speaker #2: We are pleased with the performance of our petroleum additives business during the first nine months of 2026. Our teams continue to manage through a dynamic operating environment characterized by geopolitical uncertainty, supply chain disruptions, changing trade relations and tariffs, and softer lubricant additive demand.
[Company Representative] (NewMarket Corporation): Our teams continue to manage through a dynamic operating environment characterized by geopolitical uncertainty, supply chain disruptions, changing trade relations and tariffs, and softer lubricant additive demand. We remain focused on operational efficiency, cost control, margin management, and continued investment in technology and our global manufacturing and supply network. Specialty materials sales for Q3 2026 were $62 million, compared to $38 million for the same period in 2025. Specialty materials operating profit for Q3 2026 was $16 million, compared to $6 million for Q3 2025. The increase in both sales and operating profit compared to Q3 2025 reflects a shift in shipment mix, as well as the inclusion of the Calca Solutions business acquired on 1 October 2025.
Tim Fitzgerald: Our teams continue to manage through a dynamic operating environment characterized by geopolitical uncertainty, supply chain disruptions, changing trade relations and tariffs, and softer lubricant additive demand. We remain focused on operational efficiency, cost control, margin management, and continued investment in technology and our global manufacturing and supply network. Specialty materials sales for Q3 2026 were $62 million, compared to $38 million for the same period in 2025. Specialty materials operating profit for Q3 2026 was $16 million, compared to $6 million for Q3 2025. The increase in both sales and operating profit compared to Q3 2025 reflects a shift in shipment mix, as well as the inclusion of the Calca Solutions business acquired on 1 October 2025.
Speaker #2: We remain focused on operational efficiency, cost control, margin management, and continued investment in technology and our global manufacturing and supply network. Specialty materials sales for the third quarter of 2026 were $62 million, compared to $38 million for the same period in 2025.
Speaker #2: Specialty Materials operating profit for the third quarter of 2026 was $16 million, compared to $6 million for the third quarter of 2025. The increase in both sales and operating profit compared to the third quarter of 2025 reflects a shift in shipment mix, as well as the inclusion of the Calica Solutions business acquired on October 1, 2025.
[Company Representative] (NewMarket Corporation): As we have noted before, quarterly results for the specialty materials segment will continue to vary due to the nature of the business. For the first nine months of 2026, specialty materials sales were $187 million, compared to $134 million for the same period in 2025. Specialty materials operating profit increased to $51 million, compared to $40 million in the prior year period. We continue to be pleased with the performance of our specialty materials segment and remain excited about the capacity expansion projects underway for both ammonium perchlorate and high-purity hydrazine. We expect these projects to be completed by the end of 2026 and further strengthen our ability to support critical aerospace and defense applications. Our operations generated solid cash flow during the first nine months of 2026, allowing us to invest in growth while continuing to return capital to our shareholders.
Tim Fitzgerald: As we have noted before, quarterly results for the specialty materials segment will continue to vary due to the nature of the business. For the first nine months of 2026, specialty materials sales were $187 million, compared to $134 million for the same period in 2025. Specialty materials operating profit increased to $51 million, compared to $40 million in the prior year period. We continue to be pleased with the performance of our specialty materials segment and remain excited about the capacity expansion projects underway for both ammonium perchlorate and high-purity hydrazine. We expect these projects to be completed by the end of 2026 and further strengthen our ability to support critical aerospace and defense applications. Our operations generated solid cash flow during the first nine months of 2026, allowing us to invest in growth while continuing to return capital to our shareholders.
Speaker #2: As we have noted before, quarterly results for the Specialty Materials segment will continue to vary due to the nature of the business. For the first nine months of 2026, Specialty Materials sales were $187 million, compared to $134 million for the same period in 2025.
Speaker #2: Specialty materials operating profit increased to $51 million, compared to $40 million in the prior-year period. We continue to be pleased with the performance of our Specialty Materials segment and remain excited about the capacity expansion projects underway for both ammonium perchlorate and high-purity hydrazine.
Speaker #2: We expect these projects to be completed by the end of 2026 and further strengthen our ability to support critical aerospace and defense applications. Our operations generated solid cash flow during the first nine months of 2026, allowing us to invest in growth while continuing to return capital to our shareholders.
[Company Representative] (NewMarket Corporation): During the period, we funded $88 million of capital expenditures, paid $83 million in dividends, and repurchased more than 200,000 shares for approximately $126 million. Our net debt to EBITDA ratio improved to 1x at 30 September 2026. As we look ahead to the remainder of 2026, we continue to monitor the impact of the conflict in the Middle East, the broader macroeconomic environment, and ongoing developments in international trade relations and tariffs. The surcharges and operational actions implemented earlier this year remain in place, and we will continue adjusting our approach as market conditions evolve. While the operating environment remains dynamic, we believe these actions position us well to continue delivering solid results. Our dedicated team continues to make decisions that promote long-term value for our shareholders and customers while remaining focused on our long-term objectives.
Tim Fitzgerald: During the period, we funded $88 million of capital expenditures, paid $83 million in dividends, and repurchased more than 200,000 shares for approximately $126 million. Our net debt to EBITDA ratio improved to 1x at 30 September 2026. As we look ahead to the remainder of 2026, we continue to monitor the impact of the conflict in the Middle East, the broader macroeconomic environment, and ongoing developments in international trade relations and tariffs. The surcharges and operational actions implemented earlier this year remain in place, and we will continue adjusting our approach as market conditions evolve. While the operating environment remains dynamic, we believe these actions position us well to continue delivering solid results. Our dedicated team continues to make decisions that promote long-term value for our shareholders and customers while remaining focused on our long-term objectives.
Speaker #2: During the period, we funded $88 million of capital expenditures, paid $83 million in dividends, and repurchased more than 200,000 shares for approximately $126 million.
Speaker #2: Our net debt-to-EBITDA ratio improved to 1.0 times at September 30, 2026. As we look ahead to the remainder of 2026, we continue to monitor the impact of the conflict in the Middle East, the broader macroeconomic environment, and ongoing developments in international trade relations and tariffs.
Speaker #2: The surcharges and operational actions implemented earlier this year remain in place, and we will continue adjusting our approach as market conditions evolve. While the operating environment remains dynamic, we believe these actions position us well to continue delivering solid results.
Speaker #2: Our dedicated team continues to make decisions that promote long-term value for our shareholders and customers, while remaining focused on our long-term objectives. We believe the fundamentals of how we run our business—including a long-term perspective, a safety-first culture, customer-focused solutions, technology-driven products, and world-class supply chain capabilities—will continue to benefit all our stakeholders.
[Company Representative] (NewMarket Corporation): We believe the fundamentals of how we run our business, including a long-term perspective, a safety-first culture, customer-focused solutions, technology-driven products, and world-class supply chain capabilities will continue to benefit all our stakeholders. 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.
Tim Fitzgerald: We believe the fundamentals of how we run our business, including a long-term perspective, a safety-first culture, customer-focused solutions, technology-driven products, and world-class supply chain capabilities will continue to benefit all our stakeholders. 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.
Speaker #2: 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. Ladies and gentlemen, this concludes today's conference and you may disconnect your lines at this time. We thank you for your participation.
Operator: Thank you. Ladies and gentlemen, this concludes today's conference and you may disconnect your lines at this time. We thank you for your participation.
Speaker #1: Thank you. Ladies and gentlemen, this concludes today's conference, and you may disconnect your lines at this time. And we thank you for your participation.
