- Net Income Q2 2025 net income was $111 million ($11.84 per share), down slightly from $112 million ($11.63 per share) in Q2 2024.
- Petroleum Additives Sales Q2 2025 sales were $654 million, down 2.3% from $670 million in Q2 2024, with operating profit of $140 million.
- Specialty Materials Sales Q2 2025 sales rose to $42 million, up 10.5% from $38 million in Q2 2024, with operating profit of $11 million.
- Cash Flow & Shareholder Returns The company returned $129 million to shareholders, including $77 million in share repurchases and $52 million in dividends.
- Debt Ratio Improvement Net debt-to-EBITDA ratio improved to 1.0x at the end of Q2 2025, down from 1.2x at the end of 2024.
Financial Performance
The company's financial performance was mixed, with a decline in petroleum additives sales and operating profit, but an increase in Specialty Materials sales and operating profit. The decline in petroleum additives sales was mainly due to a 2.5% decline in shipments and increased research and development investments. The company's operating profit margin for petroleum additives was 21.4% in Q2 2025, down from 22.1% in Q2 2024. On the other hand, Specialty Materials operating profit margin was 26.2% in Q2 2025, up from 13.2% in Q2 2024.
Cash Flow and Shareholder Return
The company generated solid cash flows, returning $129 million to shareholders through share repurchases of $77 million and dividends of $52 million. The share repurchases include $20 million completed in Q2 2025. As of June 30, 2025, the net debt-to-EBITDA ratio improved to 1.0 from 1.2x at the end of 2024. According to the company's management, "We continue to focus on returning value to our shareholders while investing in our business for long-term growth" (Source: Q2 2025 Earnings Call Transcript).
Valuation
At current prices, NewMarket Corporation trades at a P/E ratio of 13.92, a P/B ratio of 4.15, and a P/S ratio of 2.37. The company's EV/EBITDA ratio is 10.08, and its dividend yield is 1.5%. The free cash flow yield is 7.97%, and the ROIC is 16.82%. The company's net debt-to-EBITDA ratio is 1.15. With an EPS growth rate of 5%, the company's valuation multiples seem reasonable, but not particularly cheap.
Outlook
The company expects continued strength in petroleum additives and Specialty Materials segments and will focus on long-term value for shareholders and customers. Analysts estimate next year's revenue growth at 0.5%, which seems conservative given the company's recent performance. With a solid balance sheet and a history of returning capital to shareholders, NewMarket Corporation remains an attractive investment opportunity in the specialty chemicals sector.