NewMarket Corporation Reports Fourth Quarter and Full Year 2025 Performance
NewMarket Corporation (NYSE: NEU) Chairman and Chief Executive Officer Thomas E. Gottwald presented the company’s financial and operational results for the fourth quarter and full year ended December 31, 2025. The report highlights changes in earnings, segment performance, cash flow generation, strategic investments, and the broader economic environment influencing results.
Earnings Overview
For the fourth quarter of 2025, income before income tax expense totaled $113.2 million, down from $134.2 million in the same period of 2024. On a full-year basis, income before income tax expense reached $560.6 million, compared with $584.1 million in 2024.
Quarterly net income declined to $81.3 million, or $8.65 per share, versus $110.7 million, or $11.56 per share, a year earlier. For the full year, net income was $418.7 million, or $44.44 per share, compared with $462.4 million, or $48.22 per share, in 2024—previously a record year for the company.
The primary factor behind the year-over-year decline in net income was a higher effective income tax rate in 2025.
Petroleum Additives Segment Performance
Fourth Quarter Results
Sales in the petroleum additives segment were $585.1 million in the fourth quarter of 2025, compared with $626.1 million in the fourth quarter of 2024. Operating profit for the segment totaled $106.8 million, down from $135.7 million in the prior-year quarter.
This decrease was mainly driven by:
- A 6% decline in shipments between quarterly periods
- Lower selling prices
- Higher unit production costs caused by reduced plant production volumes used to manage inventory levels
Shipment softness was largely attributable to lower lubricant additives volumes, although fuel additives shipments increased slightly compared with the previous year.
Full-Year Results
For the full year 2025, petroleum additives sales reached $2.5 billion, compared with $2.6 billion in 2024. Operating profit declined to $520.1 million from $591.9 million, which had represented an all-time high for the segment.
Key contributors to the year-over-year decline included:
- Market softness and reduced shipments (down 4.9%)
- Strategic reduction of low-margin business
- One-time third-quarter charges related to global manufacturing optimization
- Increased technology investments to support long-term efficiency and competitiveness
Despite near-term pressures, management expects the petroleum additives segment to continue delivering solid long-term results.
Specialty Materials Segment Performance
Fourth Quarter Results
Fourth-quarter specialty materials sales rose significantly to $48.5 million, compared with $27.1 million in the same period of 2024. Operating profit increased to $7.3 million, up from $1.5 million a year earlier.
Growth was primarily driven by:
- Higher volumes at American Pacific Corporation (AMPAC)
- The inclusion of Calca Solutions, LLC, acquired on October 1, 2025
Management reiterated that quarterly variability is expected in this segment due to the nature of its business.
Full-Year Results
For the full year, specialty materials sales were $182.5 million, compared with $141.2 million in 2024. Operating profit climbed to $47.0 million, versus $17.5 million the prior year.
Results for 2024 reflected only the period following the January 16, 2024 acquisition of AMPAC. Through the AMPAC and Calca acquisitions, along with capacity expansion investments, NewMarket has committed approximately $1 billion to building a resilient, high-technology specialty materials platform.
Cash Flow, Capital Allocation, and Balance Sheet
Operations generated strong cash flows during 2025, enabling the company to:
- Pay $105.9 million in dividends
- Repurchase $77.2 million of common stock
- Fund $77.6 million in capital expenditures
- Reduce long-term debt by $87.9 million
These actions occurred even after investing more than $200 million in the Calca acquisition. As a result, NewMarket’s Net Debt-to-EBITDA ratio improved to 1.1 as of December 31, 2025.
Management emphasized that operational cash generation supports:
- Reinvestment for growth and efficiency
- Strategic acquisitions
- Continued shareholder returns through dividends and repurchases
Strategic Outlook and Market Environment
The company expressed satisfaction with overall 2025 performance across both major segments. However, the petroleum additives business continues to face:
- Soft market demand
- Global economic uncertainty
To address these conditions, NewMarket plans to:
- Continue technology investments to enhance customer solutions
- Maintain cost discipline and margin management
- Advance initiatives to create a more efficient global manufacturing network
In the specialty materials segment, the company is focused on capacity expansion and supply-chain strengthening, with new capacity expected to come online toward the end of 2026.
Management also noted ongoing monitoring of macroeconomic risks, particularly:
- Changes in international trade relations and tariffs
- Broader geopolitical and economic uncertainty
Despite these challenges, leadership reaffirmed confidence in the company’s long-term fundamentals, including:
- A long-term strategic mindset
- Safety-first culture
- Customer-focused innovation
- Technology-driven products
- World-class supply-chain capabilities
Segment Structure and Non-GAAP Measures
NewMarket’s petroleum additives segment operates across:
- North America
- Latin America
- Asia Pacific
- Europe, Middle East, Africa, and India (EMEAI)
The specialty materials segment operates primarily in North America.
The company also reports certain non-GAAP metrics, including:
- EBITDA – income before interest, taxes, depreciation, and amortization
- Net Debt – long-term debt minus cash and equivalents
- Net Debt-to-EBITDA – leverage ratio based on trailing four quarters
Management believes these measures enhance comparability and performance understanding, though they are not substitutes for GAAP results.
Company Overview and Forward-Looking Statements
NewMarket operates through several subsidiaries:
- Afton Chemical Corporation
- Ethyl Corporation
- American Pacific Corporation (AMPAC)
- Calca Solutions, LLC
These businesses develop and manufacture petroleum additives and specialty aerospace and defense materials, including ultra-pure hydrazine propellants.
The company reiterated that certain statements in the release are forward-looking and subject to risks such as:
- Raw material availability and pricing
- Operational disruptions
- Regulatory and geopolitical changes
- Customer concentration risks
- Technology and cybersecurity threats
- Environmental and legal liabilities
- Integration of acquisitions
- Pension funding requirements
- Global economic and foreign exchange fluctuations
Actual results may differ materially, and NewMarket assumes no obligation to update forward-looking statements except as required by law.
SOURCE LINK: https://www.businesswire.com/
