First Quarter Mixed for U.S. Companies

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Valvoline reported a slight loss in operating income and lubricants sales volume, HollyFrontier’s lubricants and specialty products segment posted a loss in income from operations, Milacron’s fluid technologies segment saw a loss in operating earnings, Quaker Chemical reported an increase in net income and Heritage-Crystal Clean’s oil business segment improved its revenues.

Valvoline

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Valvoline’s three operating segments – Core North America, quick lubes and international – reported combined operating income of $107 million, down slightly from the $108 million it reported in the same period last year. The quarter ending March 31 is the second quarter of Valvoline’s fiscal year.

The Lexington, Kentucky-based company saw its three segments combine for $591 million in sales, an almost 4 percent increase compared to last year. The Core North America segment accounted for $243 million of that total, approximately 41 percent of sales, while quick lubes contributed $200 million, about 34 percent. The international segment made up the rest with $148 million in sales, or 25 percent.

North American lubricants sales reached 22.4 million gallons, down 9 percent from 24.6 million in 2018. In its earnings release, the company attributed the decrease to the do-it-for-me installer channel. Ongoing softness and competitive pressures in the broader retail automotive lubricant market will continue to impact year-over-year volume in the retail channel, Valvoline predicted.

Quick-lube lubricants sales reached 7 million gallons, up almost 19 percent from 5.9 million the previous year. Valvoline reported a net gain of 26 new stores during the quarter.

International lubricants sales remained steady at 15 million gallons, the same volume from a year ago. Sales volume grew 8 percent in the Europe, Middle East and Africa region, but was offset by declines in the Latin America and certain Asia-Pacific markets.

Valvoline said its second-largest United States blending plant, in Deer Park, Texas, was temporarily shut down on March 18 due to a fire at the nearby Intercontinental Terminal Co. facility. Its plant sustained no damage and has already restarted operations, with little effect on customers, but the shutdown did cost the company approximately $1 million in its second quarter.

“Our best-in-class Quick Lubes business delivered another strong quarter, with double-digit same-store sales growth and the addition of 26 net new stores,” Valvoline CEO Sam Mitchell said in the release. “In Core North America, the actions we implemented in response to difficult DIY market dynamics drove notable improvement in our branded volume in the retail channel, leading to better overall sequential performance for the segment. Challenges in the market remain and impacted year-over-year results, and we continue to work to stabilize performance in Core North America. The recent increases in raw material costs have reduced our earnings expectations for the year.”

HollyFrontier

Dallas, Texas-based HollyFrontier Corp.’s lubricants and specialty products reported a $9 million loss in income from operations in its first quarter ending March 31, down from income of $32 million in the previous year. Revenues from external customers increased 11 percent, from $445 million in 2018 to $493 million in 2019.

The lubricants and specialty products segment includes Petro-Canada Lubricants and its Mississauga, Ontario, refinery, which makes products such as base oils, white oils, specialty products and finished lubricants, along with specialty lubricants from HollyFrontier’s Tulsa refineries. Recently acquired companies Red Giant Oil Co. and Sonneborn are now also part of the company’s lubricants and specialty products segment. HollyFrontier acquired Parsippany, New Jersey-based Sonneborn for $665 million in November of last year.

“HollyFrontier posted a solid first quarter despite seasonally weak product cracks and maintenance at our Tulsa [Oklahoma] and El Dorado [Kansas] refineries,” said HollyFrontier President and CEO George Damiris in the company’s earnings release. “We continue our long-term efforts to improve reliability across our refining system. With a rebound in the gasoline market and no major planned downtime until September, we are well positioned for strong financial performance heading into the summer driving season.”

Milacron

Milacron’s Fluid Technologies segment reported operating earnings of $5.4 million, down an even 10 percent from the year prior.

Sales for the Cincinnati-based company’s segment – which supplies metalworking and industrial fluids – dropped almost 4 percent, from $32 million a year ago to $29.3 million in 2019’s first quarter.

Quaker Chemical

Conshohocken, Pennsylvania-based Quaker Chemical posted a less than 1 percent decline in net sales: $211.2 million in the first quarter of 2019 compared to $212.1 million in the same period last year. Increases in volume, selling prices and product mix were offset by the negative impact of foreign currency translation, the company said in its earnings release.

The fluid and chemical manufacturers net income reached $13.8 million, up 9 percent from $12.7 million.

The company said its results were affected by its ongoing merger with Houghton International, which has yet to be finalized.

Heritage-Crystal Clean

Heritage-Crystal Cleans oil business segment posted $29.3 million in revenue for its first quarter ending March 23, a 14 percent jump from $25.7 million last year.

“As expected, we experienced downward pressure on our base oil price during the first quarter resulting in significant compression of our base oil spread. We also experienced a mechanical failure at our rerefinery, which led to unscheduled downtime,” Heritage-Crystal Clean President and CEO Brian Recatto said in the company’s earnings news release. “We have seen multiple base oil price increases and widening spreads early in the second quarter, and our rerefinery has returned to normal operations.”

The Elgin, Illinois-based company’s oil business segment includes used oil collection activities, sales of recycled fuel oil and rerefining activities.