Newmarket 2025 Q2 Earnings Resilience Despite 0.3% Net Income Decline

Newmarket (NEU) reported its fiscal 2025 Q2 earnings on Jul 31st, 2025. Newmarket's revenue decreased by 1.7% year-over-year, and its net income declined by 0.3% compared to the previous year. The company’s earnings per share increased by 1.8%, underscoring strong operational resilience. The company did not specify whether results met or missed expectations. Looking ahead, Newmarket remains committed to enhancing operational efficiency and investing in technology. The company is closely monitoring the macroeconomic environment while maintaining its long-term view to promote shareholder value.

Revenue

Newmarket experienced a slight decline in total revenue for Q2 2025, reaching $698.51 million compared to $710.23 million in the same quarter last year. The petroleum additives segment generated $653.88 million, while specialty materials contributed $42.04 million. Lubricant additives accounted for $556.48 million, and fuel additives brought in $97.40 million. The category labeled "All other" added $2.60 million to the overall revenue.

Earnings/Net Income

Newmarket's earnings per share rose to $11.84 in Q2 2025 from $11.63 in Q2 2024, reflecting positive growth. However, net income slightly decreased to $111.24 million, down from $111.62 million in the previous year. The company's EPS growth signals solid earnings performance.

Price Action

The stock price of Newmarket climbed 5.37% during the latest trading day, dropped 4.44% during the most recent full trading week, and edged down 0.56% month-to-date.

Post-Earnings Price Action Review

The investment strategy of acquiring NewMarket shares following a quarter of revenue growth and holding them for 30 days has proven successful over the past three years. This method delivered a 98.18% return, surpassing the benchmark return of 85.57% by 12.61%. With a compound annual growth rate (CAGR) of 14.77% and no maximum drawdown, the strategy demonstrated strong risk-adjusted performance. Additionally, a Sharpe ratio of 0.60 and a volatility of 24.63% underscored the strategy's stability and potential for future success. This indicates that, despite some fluctuations, the strategy has consistently provided robust returns in comparison to the benchmark, showcasing its effectiveness in managing risk and capitalizing on market opportunities.

CEO Commentary

NewMarket Corporation's Chairman and CEO, Thomas E. Gottwald, expressed satisfaction with the strong business performance in the first half of 2025. He reported record net income of $237 million and earnings per share of $25.11. Gottwald noted a decrease in petroleum additives operating profit due to reduced shipments and increased technology investments. Conversely, the specialty materials segment showed robust growth, driven by higher volumes. He remains optimistic about ongoing efficiency initiatives and emphasized the importance of technology investments to enhance operational efficiency and profitability.

Guidance

The company remains focused on improving operational efficiency and investing in technology to meet customer needs throughout 2025. Gottwald highlighted the importance of monitoring the macroeconomic environment, particularly international trade relations, while maintaining a long-term perspective to promote shareholder value. He emphasized that the company's fundamentals, including a safety-first culture and technology-driven product offerings, will support strategic objectives moving forward, ensuring value for both stakeholders and customers.

Additional News

In the first half of 2025, NewMarket Corporation repurchased $77.2 million worth of common stock and reduced net debt by $122.2 million. These strategic moves underscore the company’s commitment to enhancing shareholder value and maintaining financial flexibility. Additionally, NewMarket paid out dividends amounting to $51.9 million, demonstrating its dedication to returning capital to shareholders. As part of its strategic initiatives, the company continues to prioritize technology investments and operational efficiency, aiming to navigate the uncertain macroeconomic environment effectively. With a focus on long-term objectives, NewMarket is committed to leveraging its strong operating cash flows to deliver consistent value to stakeholders.