NewMarket lifts net income to $124.1 million in third quarter of 2026
Key Facts
NewMarket said on October 28 that net income for the third quarter ended September 30, 2026, was $124.1 million, compared with $100.3 million in the same period last year, while earnings per share rose to $13.50 from $10.67. The company said higher operating profit and a lower effective tax rate were the main drivers of net income growth. Its data showed that segment performance moved in different directions: operating profit in petroleum additives declined, while specialty materials posted increases in sales and operating profit. In trading, the company's stock closed at $873.27 on October 28, then at $803.07 on October 29 and $783.66 on October 30. Available trading data do not establish that the stock's movement was a reaction to the results, which the company announced on October 28.
The effective tax rate was 17.9% in the third quarter, compared with 26.1% a year earlier. The company attributed the decline mainly to adjustments in estimates for taxes from prior years and lower taxes on foreign earnings. It said higher operating profit offset the effects of differences among segments, and that the two factors together drove the increase in net income. The tax comparison provides important context for assessing earnings growth, alongside the businesses' operating performance. Net income growth therefore did not stem from uniform improvement across all activities.
In petroleum additives, sales rose to $651.0 million from $649.1 million in the third quarter of 2025, but operating profit fell to $130.9 million from $131.3 million. The company said shipments of lubricant additives declined 8% amid broader market weakness. It added that it had applied surcharges to offset higher costs related to supply-chain disruptions in the Middle East. It also said the surcharges and operational measures adopted earlier in the year to address rising raw material, utility and logistics costs remained in effect. The divergence between sales and operating profit shows how nearly stable revenue coincided with pressures on shipments and costs.
By contrast, specialty materials sales rose to $62.0 million in the third quarter from $38.2 million a year earlier, while operating profit increased to $16.4 million from $6.0 million. The company attributed sales growth to a change in shipment mix and the inclusion of results from Calca, which it acquired in October 2025. The segment was one source of operating improvement in the quarter, as operating profit declined in the larger petroleum additives business. The company said it continued to invest in technology, control costs and manage margins, and strengthen its global manufacturing network to improve product delivery efficiency. It also said it was monitoring the effects of the Middle East conflict, an uncertain macroeconomic environment, changes in international trade and tariffs.
In the first nine months of 2026, net income was $375.9 million and earnings per share were $40.64, compared with $337.5 million and $35.78, respectively, in the same period of 2025. Meanwhile, petroleum additives shipments fell 6.1% over the nine months. The company said this reflected its strategic decision to review and reduce lower-margin business, as well as market weakness in the current quarter. In its use of cash, the company funded $88.5 million in capital spending and paid $83.1 million in dividends. It also repurchased more than 200,000 shares for $126.4 million and reduced net debt to EBITDA to 1.0 times as of September 30. The figures combine nine-month earnings growth with continued allocation of funds to investment and shareholder returns.
NewMarket announced in October that it had raised its quarterly dividend to $3.25 per share, an increase of $0.25, or about 8%, from the previous dividend of $3.00. The company had scheduled a call to review its third-quarter results for October 29, 2026, at 3:00 p.m. Eastern time. A replay of the call is available until November 12, 2026, at 3:00 p.m. Eastern time, while a webcast replay is available for 30 days. The company said it expected to complete its ammonium perchlorate and high-purity hydrazine capacity expansion projects by the end of 2026. The expansion and quarterly dividend dates place the company's announced next steps in the context of its quarterly results.