Stock Trading in Red: NewMarket Corporation (NYSE: NEU)

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NewMarket Corporation (NYSE: NEU) stock rose 4.1% on 4th Feb, 2020 (As of 10:34 am GMT-5; Source: Google finance) as the company reported the net income for the fourth quarter of 2019 of $50.1 million, compared to net income of $62.8 million for the fourth quarter of 2018. The company’s profit before income taxes for the fourth quarter of 2019 has fallen to $66.6 million compared to $71.1 million in 2018. The company’s profit before income for 2019 had increased to $331.6 million compared to $290.3 million for 2018. The company has reported the net income for 2019 of $254.3 million, compared to net income of $234.7 million, for 2018. During the year 2019, the company had funded capital expenditures of $59.4 million, paid dividends of $81.7 million, and repaid $123.5 million of borrowings on the revolving credit facility.

Meanwhile, in 2019, the company began to see a turnaround in the operating performance of petroleum additives as compared to the prior year. In the two years prior to 2019, their operations were affected due to a challenging economic environment marked by a sustained increase in raw material costs. Further, Petroleum additives operating margin for the rolling four quarters ended December 31, 2019 was 16.5% which is more in line with the historical ranges the shareholders have come to expect.

Moreover, the sales for the petroleum additives segment for the fourth quarter of 2019 were down 1.0% to $531.8 million compared to the same period last year. Petroleum additives operating profit for the fourth quarter of 2019 has decreased to $73.6 million, compared to $79.5 million for the fourth quarter of 2018. The decrease was mainly on the back of changes in selling prices, and foreign currency rates, which was partially offset by lower raw material costs. Shipments increased 1.4% between periods, due to increase in lubricant additives shipments, which was partially offset by decreases in fuel additives shipments. North America and Europe were the mainly drivers for the increase in lubricant additive, which was partially offset by decreases in Asia Pacific. The decrease in fuel additives shipments was mainly due to Latin America. The increase in shipments between the fourth quarter periods represents the first time since the second quarter 2018 that the company had an increase, with steady improvement reflected in each of the quarters in 2019.

NEU expects the petroleum additives market to grow at the range of 1% to 2% for the foreseeable future.

 

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