NewMarket Corporation (NYSE:NEU), parent company of petroleum additive manufacturer and marketer Afton Chemical, reported higher first quarter net income, driven primarily by lower raw material costs.
Net income for the first quarter of 2015 increased to USD 63.9 million, or USD 5.14 per share, up 11.2% over the first quarter of 2014 of USD 57.5 million, or USD 4.43 per share.
Earnings for both the first quarter of this year and last year included an unfavorable impact from valuing an interest rate swap at fair value. Excluding this item, earnings per share (EPS) for the first quarter of 2015 would have been USD 5.26 per share, compared to USD 4.54 per share for the same period a year ago.
Petroleum additives began 2015 with quarterly operating profit of USD 105.0 million, up 9.2% over the same period a year ago. Lower raw material costs between the quarterly periods resulting from lower prices were the primary driver for the increase, the company said.
Sales of petroleum additives for this year’s first quarter were USD 554.8 million, down 3.4% versus the same period a year ago, mainly due to a strong US dollar. However, the company said it had record first quarter shipments in 2015, which were up 1.5% over the same period a year ago.
NewMarket also reported that it had funded capital expenditures of USD 20.4 million, primarily to support the construction of the Singapore plant, during the quarter.
“We are pleased with our performance and earnings results in the first quarter of this year. We have made significant investments in people, research and development activities, and technical and production facilities over the past several years, and expect to continue to do so in the future. Doing so will help to ensure that we are well-positioned to deliver goods and services our customers value while continuing to provide solid returns for our shareholders,” said Chairman and Chief Executive Officer, Thomas E. Gottwald.
“We believe this long-term strategy will help us achieve our plan to exceed the industry growth rate, which is currently estimated to be 1% to 2% over the next five years.”