Afton Chemical reported a 68% jump in operating profit despite a 4% decline in sales for the quarter ending Sept. 30, as lubricant additive shipments were down in all regions except North America.
Meanwhile, WD-40 Inc. reported a 12% increase in net income for the fourth quarter of its fiscal year, boosted by increased sales of its maintenance products in the United States, while net income for its fiscal year declined 2%.
Afton Chemical
Afton Chemical, which is NewMarket Corp.’s petroleum additives segment, reported operating profit of $139.8 million in the third quarter, improving from $83 million in the same period last year. “The increase in operating profit was mainly due to selling prices, including favorable mix, as well as lower raw material costs, partially offset by lower shipments and higher operating costs,” NewMarket said in its earnings release posted today.
Segment sales for the quarter declined to $663.7 million, compared to $692.7 million.
“Our shipments have been impacted the last several quarters by the overall global economic weakness and inventory rationalization that is affecting the chemical industry,” NewMarket Chairman and CEO Thomas E. Gottwald said in the earnings release. “We continue to be challenged by the ongoing inflationary environment impacting us, including our raw material and operating costs. During this period, we have remained focused on controlling operating costs, continuing our investment in technology, and managing our inventory levels, as well as our customer portfolio.”
Richmond, Virginia-headquartered NewMarket reported net income of $111.2 million, a 76% improvement from $63.2 million. That was $11.60 earnings per diluted share for the quarter, compared to $6.32 per diluted share.
WD-40
WD-40 posted net income of $16.6 million for its fourth quarter of its fiscal year ending Aug. 31, compared to $14.8 million, and a net income of $66 million for the full fiscal year, down from $67.3 million.
Net sales for the San Diego-based company in the final quarter totaled $140.5 million, up 8% from $130.4 million in the same quarter last year. For the full fiscal year, net sales reached $537.3 million, a 4% increase.
Net sales in the Americas for the quarter reached $74.7 million, a 10% rise from $68 million. For the full fiscal year, sales in that segment rose increased 11% to almost $267 million.
The company attributed the 18% increase in the quarter mostly due to higher sales of maintenance products in the U.S., driven by price increases and strong demand, though sales in Canada decreased 3% due to weaker economic conditions. Sales also decreased in Latin America by 12%, though the company says that’s compared to a strong performance in the quarter in the region last year when sales increased 79%.
In Europe, the Middle East and Africa, sales in the quarter climbed 16% to $50.7 million. For the fiscal year, however, total sales dropped 7% to $190.8 million.
The segment benefited from price increases and changes in foreign currency exchange in the quarter. Direct market sales increased 19% because of higher sales of maintenance products, partially offset by lower demand.
In the Asia-Pacific sector, net sales for the quarter declined 20% to $15 million . For of the fiscal year, sales reached $79.6 million, an 8% increase. The company said the 20% drop in the fourth quarter was primarily due to lower sales of maintenance products in the Asia distributor markets, which dropped 38%. Net sales in Australia dropped 1%, and sales in China dipped 4%. “We saw significant improvement through the second half of the [fiscal] year as sales volumes recovered,” WD-40 President and CEO Steve Brass said in the company’s earnings release.