Yahoo Finance NewMarket Corporation (NYSE:NEU) Q1 2024 Earnings Call Transcript
NewMarket Corporation (NYSE:NEU) Q1 2024 Earnings Call Transcript April 25, 2024
NewMarket Corporation isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Greetings. Welcome to NewMarket Corporation's Conference Call and Webcast to review First Quarter 2024 Financial Results. At this time, all participants are placed on a listen-only mode. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Bill Skrobacz, Vice President and CFO at NewMarket Corporations. Bill you may begin.
Bill Skrobacz: Thank you, Paul, and thanks to everyone for joining me this afternoon. As a reminder some of the statements made during this conference call may be forward-looking. Relevant factors that could cause actual results to differ materially from those forward-looking statements are contained in our earnings release and in our SEC filings including our most recent Form 10-K. During this call, I will also discuss the non-GAAP financial measures included in our earnings release. The earnings release, which can be found on our website includes a reconciliation of the non-GAAP financial measures to the comparable GAAP financial measures. We filed our 10-Q this morning. It contains significantly more details on the operations and performance of our company.
Please take time to review it. I will be referring to the data that was included in last night's earnings release. Net income for the first quarter of 2024 was $108 million or $11.23 a share compared to net income or $98 million or $10.09 a share for the first quarter of last year. Petroleum additives sales for the first three months of 2024 were $677 million, compared to $700 million for the same period in 2023. Petroleum additives operating profit for the first quarter was $151 million, compared to $132 million for the first quarter of 2023. The increase was mainly due to lower raw material and operating costs, partially offset by lower selling prices and product mix. Shipments increased 5% between quarterly periods with increases in both lubricant additives and fuel additive shipments across all regions except Latin America, which reported a decrease in lubricant additive shipments in North America, which reported a decrease in fuel additive shipments.
We're pleased with the strong performance of our petroleum additives business during the first quarter of 2024. It is the sixth consecutive quarter with operating profit over $100 million. We are seeing evidence that our efforts to control operating costs are taking hold. Throughout 2024, managing our operating costs, our inventory levels and our portfolio profitability while continuing our investment in technology will remain priorities. We completed the acquisition of American Pacific Corporation or AMPAC on January 16, 2024 for approximately $700 million. Our first quarter results include 76 days of AMPAC operations. The financial results of our AMPAC business are included in our new specialty materials segment. Specialty materials sales for the first quarter of 2024 were $17 million and we reported an operating loss of $5 million.
The loss primarily results from the sale of AMPAC finished goods inventory we acquired. This inventory was recorded at fair market value on the acquisition date and sold during the first quarter generating no margin. We may see substantial variation in our quarterly results for AMPAC on an ongoing basis due to the nature of the business and we anticipate full year results to be consistent with our pre-acquisition expectations. We generated solid cash flows from operations during the quarter. We funded capital expenditures of $14 million and we paid dividends of $24 million. In February, our Board approved an 11% increase in our quarterly dividend rate. The acquisition of AMPAC was funded by cash on hand and borrowings of approximately $690 million under our then existing revolving credit facility.
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