Yahoo Finance NewMarket Corporation (NYSE:NEU) Q4 2023 Earnings Call Transcript
NewMarket Corporation (NYSE:NEU) Q4 2023 Earnings Call Transcript February 1, 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: Good day and welcome to the NewMarket Corporation Scheduled Conference Call and Webcast to review the Fourth Quarter and Full Year 2023. At this time, all participants are placed on a listen-only mode. And it now my pleasure to turn the floor over to your host, Mr. Bill Skrobacz. Sir, the floor is yours.
Bill Skrobacz: Thank you, Ali and thanks to everyone for joining me this afternoon. As a reminder, some of the statements made during this conference call maybe 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, we 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 intend to filed our 2023 10-K in the middle of February. It will contain significantly more details on the operations and performance of our company.
Please review it. I will be referring to the data that was included in last night’s release. Net income for the fourth quarter of 2023 was $80 million or $8.38 per share, compared to net income of $91 million or $9.26 per share for the fourth quarter of 2022. Net income for 2023 was $389 million or $40.44 per share compared to net income of $280 million or $27.77 per share for 2022. Petroleum additives sales for the fourth quarter of 2023 were $642 million compared to $680 million for the same period in 2022. Petroleum additives operating profit for the fourth quarter of 2023 was $110 million compared to $117 million for the fourth quarter of 2022. The decrease in operating profit was mainly due to higher operating costs and lower shipments, partially offset by lower raw material costs.
We also experienced lower selling prices offset by favorable product mix. It's also worth noting that the operating results for both fourth quarter periods were very strong when compared to our historical fourth quarter operating results. Sales for petroleum additives segment for 2023 were $2.7 billion compared to $2.8 billion in 2022. Petroleum additives operating profit for 2023 was $514 million compared to $378 million for 2022. The increase in operating profit was a result of selling prices, including favorable product mix, partially offset by lower shipments and higher raw material and operating costs. Shipments decreased 10.7% when comparing 2023 to 2022, with decreases in both lubricant additives and fuel additive shipments in all regions except Europe, which reported a small increase in fuel additive shipments.
During 2023, our shipments were impacted by the overall global economic weakness and inventory rationalization, which persists in the chemical industry. We remain challenged by the ongoing inflationary environment and continue to experience increased operating costs. We are maintaining our focus on managing our operating costs, our inventory levels, and our portfolio profitability, while continuing our investment in technology. We are very pleased with the performance of our petroleum additives business in 2023 and the work done by our team to achieve four quarters of strong operating profit. We generated solid cash flows throughout the year, our working capital improved by $134 million, and we made payments of $361 million on our revolving credit facility.
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