Afton, Valvoline Report Mixed Results


Afton Chemical had decreased profits last year, despite enjoying a strong fourth quarter, and Valvoline reported a decrease in operating income but an increase in sales for its first quarter.

Afton Chemical

Richmond, Virginia-based Afton, the petroleum additives segment of NewMarket Corp., posted an operating profit of $77.9 million for its fourth quarter ending Dec. 31, up three percent from the same period of 2016. The increase was mainly due to increased shipments, changes in selling prices and product mix, partially offset by higher raw material and conversion costs, NewMarket CEO Thomas E. Gottwald said in the earnings report. For the full year, operating profit fell to $359.8 million, a 6.5 percent decrease from 2016.

Petroleum additives segment revenue jumped 11.5 percent to $556.9 million during the fourth quarter. Full year revenue for the segment grew 7.5 percent to $2.2 billion. Shipments of petroleum additives also enjoyed a healthy increase, jumping 8 percent in the fourth quarter and 8.2 percent during the full year.

All regions contributed to the [fourth quarter] increase in lubricant additives shipments, and Europe was the primary driver of the increase in fuel additives shipments, Gottwald noted.

NewMarket reported fourth quarter net income of $4.1 million, or $0.35 per diluted share, down from $45.7 million from their fourth quarter in 2016. For the full year, the company recorded net income of $109.5 million, or $16.08 per diluted share, down from $243.4 million in 2015.

“As we look forward to 2018 and beyond, we expect continued strength in our petroleum additives sales and shipments,” said Gottwald. “Our views toward the fundamentals of our industry remain unchanged, with the petroleum additives market growing at 1 percent to 2 percent for the foreseeable future, and we expect to exceed that growth rate.”


Valvoline’s operating income fell roughly 6 percent to $83 million for its three operating segments – North America, quick lubes and international – during its first fiscal quarter ending Dec. 31.

The Lexington, Kentucky-headquartered company reported total sales of $545 million, up from $489 million during the same quarter last year. The core North America segment accounted for approximately 46 percent, quick lubes for 28 percent and international sales for 23 percent. Strong same store sales in Valvoline Instant Oil Change locations, growth in premium products and volume growth in the international segment were credited as the driving forces behind the increase in sales.

North America lubricant sales increased 5 percent to $251 million during the first quarter. Lubricant volume for the segment dipped 1 percent to 23.8 million gallons. Core North America branded volumes grew slightly in the quarter. These gains were offset by a decline in non-branded volume, primarily driven by the timing of promotions, said the company in its earnings report.

Quick lubes sales soared to $154 million, a 17.5 percent increase over last year’s $127 million in last years first quarter. Valvoline added 12 new instant oil change locations this quarter.

The company’s international segment jumped to $140 million from $125 million during the same quarter last year. International lubricant volume also grew, increasing 4 percent to 43.8 million gallons.

“First-quarter results were consistent with our expectations, despite modestly higher-than anticipated costs from hurricane impacts and our new packaging launch,” said Sam Mitchell, Valvoline’s CEO. “Premium mix improved across all segments, international volume growth continued, and same-store sales were strong, even compared to the outstanding quarter VIOC had last year – all demonstrating the health of the business and that we are on track to meet our goals for the year.”

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