NewMarket Specialty Materials Profit Falls From Second-Quarter Level

The Tip Desk · November 2, 2026 · 3 min read

Specialty materials operating profit fell to $16.4 million in the third quarter as petroleum additives shipments dropped 8% and net income was $124.1 million.

NewMarket Corporation (NEU), the holding company for petroleum-additive and aerospace-chemical businesses, reported third-quarter net income of $124.1 million, or $13.50 a share, compared with $100.3 million, or $10.67 a share, a year earlier.

The company said higher operating profit and a reduced effective tax rate were the primary drivers of the year-over-year increase. Net income was $133.8 million, or $14.54 a share, in the second quarter. Total net sales were $716.5 million.

Petroleum additives, the larger of the two reportable segments, generated $651.0 million of sales, essentially unchanged from $649.1 million a year earlier. Operating profit in that segment was $130.9 million, compared with $131.3 million in the third quarter of 2025. Shipments fell 8% amid broader market softness in lubricant additives, the company said. It said it implemented surcharges to offset higher costs from supply-chain disruptions in the Middle East and that a focus on operational efficiency helped sustain operating-profit margins. Surcharges and operational actions taken earlier in the year to address higher raw-material, utility and logistics costs remained in place, the company said, and it continued to evaluate and adjust its approach as market conditions evolve.

Specialty materials reversed the second-quarter lift. Sales were $62.0 million, compared with $38.2 million a year earlier, and operating profit was $16.4 million, compared with $6.0 million. The company attributed the sales increase to a shift in product shipment mix and the inclusion of Calca Solutions, LLC, acquired on October 1, 2025, and said the operating-profit increase was driven by the mix shift. It said it expects variation in quarterly results for the segment on an ongoing basis. Specialty materials sales were $67.2 million and operating profit $22.3 million in the second quarter. The company said it looks forward to capacity-expansion projects for ammonium perchlorate and high-purity hydrazine being completed by the end of 2026.

Gross profit was $222.4 million. Operating profit was $142.9 million. EBITDA was $190.0 million. Corporate unallocated expense was $4.0 million. Interest and financing expenses, net, were $8.0 million. Other income, net, was $16.2 million. Income tax expense was $27.0 million.

For the first nine months of 2026, net income was $375.9 million, or $40.64 a share, compared with $337.5 million, or $35.78 a share, in the same period of 2025. Petroleum additives sales were $1.9 billion for both nine-month periods. Operating profit was $415.3 million, compared with $413.2 million. The company said shipments fell 6% versus the year-ago nine months, driven by first-half effects of a strategic decision to examine and reduce low-margin business and current-quarter market softness. Specialty materials sales were $187.3 million and operating profit $51.2 million for the nine months.

Cash flow in the first nine months funded capital expenditures of $88.5 million, dividends of $83.1 million, and repurchases of more than 200 thousand shares for $126.4 million. The company said it reduced its Net Debt to EBITDA ratio to 1.0 times, matching the second-quarter ratio. Cash dividends declared were $3.00 a share. Long-term debt was $830.1 million at September 30, 2026. Cash and cash equivalents were $77.3 million. Net debt was $752.7 million.

The company said it continues to monitor the conflict in the Middle East, the uncertain macroeconomic environment, and changes in international trade relations and tariffs. It said it will continue to invest in technology, focus on cost control and margin management, and advance initiatives to strengthen its global manufacturing network.