NewMarket Corporation: A Strong Finish to 2024
Friday, Jan 3, 2025 5:08 pm ET
NEU --
As the year 2024 comes to a close, NewMarket Corporation (NEU) is set to review its fourth quarter and full-year financial results in an upcoming conference call and webcast. The company has had a strong performance throughout the year, driven by its focus on cost-cutting measures, inventory management, and strategic acquisitions. Let's take a look at what investors can expect from NewMarket's financial results and the key factors that have contributed to its success.

1. Cost-cutting measures and inventory management: NewMarket has seen significant improvements in its operating profit, primarily due to lower raw material and operating costs. The company's focus on margin management, operating cost management, inventory levels, and portfolio profitability has led to strong financial performance in its petroleum additives business throughout 2024. In the third quarter of 2024, petroleum additives operating profit increased to $157.5 million, up from $139.8 million in the same period last year. For the first nine months of 2024, petroleum additives operating profit reached $456.2 million, compared to $404.0 million in the same period last year (NewMarket Corporation, 2024).
2. Strategic acquisition of AMPAC: NewMarket's acquisition of American Pacific Corporation (AMPAC) on January 16, 2024, has expanded its specialty materials segment's financial performance. The acquisition has allowed NewMarket to leverage its long-term view, safety-first culture, customer-focused solutions, technology-driven product offerings, and world-class supply chain capability to benefit all stakeholders. In the third quarter of 2024, the specialty materials segment reported sales of $59.1 million, with an operating profit of $16.0 million. For the first nine months of 2024, sales in this segment reached $114.2 million, with an operating profit of $16.0 million (NewMarket Corporation, 2024).
3. Strong cash flow and debt management: NewMarket's operations have produced strong cash flows during the first nine months of 2024. The company paid dividends of $72.0 million and funded capital expenditures of $42.7 million. Since the AMPAC acquisition, NewMarket has made net payments of $259.0 million on its revolving credit facility. As of September 30, 2024, the company's Net Debt to EBITDA ratio was 1.4, which is slightly below its target operating range of 1.5 to 2.0 (NewMarket Corporation, 2024).
As NewMarket Corporation prepares to review its fourth quarter and full-year 2024 financial results, investors can expect to see a strong finish to the year, driven by the company's focus on cost-cutting measures, inventory management, strategic acquisitions, and effective debt management. The company's commitment to long-term value creation for shareholders and customers, combined with its robust cash flow and prudent debt management, positions it to continue its commitment to delivering value to stakeholders.