Newmarket 2025 Q2 Earnings Slight Revenue Dip as Net Income Declines 0.3%

Newmarket (NEU) reported its fiscal 2025 Q2 earnings on Jul 30th, 2025. The company experienced a slight revenue decrease of 1.7%, totaling $698.51 million compared to $710.23 million in the previous year. Newmarket's net income also declined by 0.3% to $111.24 million, down from $111.62 million in 2024 Q2. Despite these dips, Newmarket's EPS saw a 1.8% increase, reaching $11.84, a testament to ongoing earnings growth. The results were generally in line with expectations, and the company maintained its guidance, focusing on operational efficiency and technology investments.

Revenue
Newmarket's total revenue for Q2 2025 reached $698.51 million, reflecting a 1.7% decline from the prior year. The Petroleum Additives segment contributed $653.88 million, while Specialty Materials generated $42.04 million. The remaining $2.60 million came from other segments, culminating in the total revenue figure.

Earnings/Net Income
Newmarket's EPS grew by 1.8% to $11.84 in Q2 2025, up from $11.63 in the same quarter of 2024. However, net income experienced a slight decline of 0.3%, falling to $111.24 million. This mixed performance highlights a positive trend in earnings per share despite overall profitability pressures.

Price Action

Post-Earnings Price Action Review
Investors have seen strong returns by purchasing NewMarket (NEU) shares following a quarter with revenue growth and holding for 30 days. Over the past three years, this strategy yielded an impressive overall return of 89.47%, outperforming the benchmark return of 87.61% by 1.86%. The strategy showcased a compound annual growth rate (CAGR) of 13.73% and exhibited solid risk-adjusted performance, supported by a Sharpe ratio of 0.56 and a volatility of 24.56%. This indicates that while the approach had no maximum drawdown, it delivered consistent and competitive returns within the given period. The strategy's success underscores the potential advantages of leveraging earnings momentum and disciplined investment timing to achieve superior market performance.

CEO Commentary
Thomas E. Gottwald, Chairman and Chief Executive Officer of NewMarket Corporation, expressed satisfaction with the company’s strong performance during the first half of 2025, highlighting record net income of $237 million and operational cash flows. He noted that the petroleum additives segment faced challenges due to a decline in shipments and rising technology investments, yet emphasized the positive impact of a favorable product mix. Gottwald reaffirmed the company’s commitment to enhancing operational efficiency and technology investments, stating that these priorities will remain central to their strategy in navigating the uncertain macroeconomic environment.

Guidance
NewMarket Corporation anticipates continued focus on efficiency initiatives and technology investments throughout 2025. The company is closely monitoring the macroeconomic landscape, including international trade relations and tariffs, while maintaining a long-term perspective on value creation for stakeholders. The leadership is optimistic about leveraging their safety-first culture and customer-centric solutions to drive future growth and profitability, reinforcing their commitment to improving portfolio profitability and operational capabilities in a dynamic market environment.

Additional News
In recent developments, Newmarket Corporation announced a strategic capital investment of $100 million to enhance production capacity at the Ampac facility in Utah. This investment aims to boost production capabilities by over 50%, primarily focusing on solid rocket motors, signaling a strong commitment to growth in the Specialty Materials segment. Furthermore, Newmarket has been actively returning value to shareholders, having repurchased $77.2 million worth of common stock and paying $51.9 million in dividends during the first half of 2025. These actions demonstrate the company's dedication to optimizing shareholder returns and maintaining a robust financial position.