In February, the company stated an earnings per share goal of $10 by 2012. Given our favorable results to date, we expect to meet this goal ahead of schedule, said James Hambrick, Lubrizols chairman, president and CEO. And so, we believe it is appropriate to revisit our longer-term targets, especially to reinforce our positive outlook for sustained growth beyond 2010.

Lubrizol officials gave presentations Tuesday at an analysts day event in New York City. Hambrick addressed The Bear Case: 5 Myths About Lubrizol.

One myth cited was Additive margins are at record highs and not sustainable. Hambrick asserted that favorable trends continue for margin sustainability. He pointed out that gross profit margins in additives returned last year to the levels of the mid-1990s and the long-term average, both in the mid 30 percent range. Price increases have continued where needed, he added.

Customers business models have changed, he observed, putting more focus on improving margins through differentiated offerings. Hambrick contended that end consumers are relatively price insensitive. The company believes that new entrants and new excess capacity in additives were unlikely.

Another myth addressed was New competitors will enter the additives market. Hambrick said high barriers to entry remain for global performance level additive products for newcomers, including the need for significant start-up capital. Given the market size, its unlikely that additives are considered strategic to major oil and chemical companies, he noted. Lubrizol believes that new entrants to additives are unlikely except as component suppliers.

Hambrick also responded to the myth that additives is a no-growth market, noting that Lubrizol additive volumes have had a 2 percent compound annual growth rate over the long term from 1978 through 2010. Oil company studies have found lubricant demand correlates with world population growth of 2 percent per year, he pointed out. In its October 2010 guidance, Lubrizols annual growth target is about 3 to 4 percent.

Favorable lubricant additives volume drivers expected to continue, according to Hambrick, include growth in the world vehicle population, a fleet mix of diesel versus gasoline, increased specifications and market upgrades. Negative factors such as drain interval extension have stabilized, according to Lubrizol.

Electric vehicle impact is unlikely in next 20 years, he asserted, with diesel engine technology to remain the dominant power plant.

He also provided an update on Lubrizols new $200 million wholly-owned plant in Zhuhai Gaolan Port Economic Zone in southern China. Construction is scheduled to begin in late 2010, with production targeted for 2013. Phase I of the plant will include engine oil additive component manufacturing and blending, Hambrick confirmed.

Dan Sheets, president of Lubrizol Additives, gave a presentation that included a chart showing relative positions of the four major additive suppliers. Under engine additives, the chart listed Lubrizol as additives market leader for heavy duty diesel oils and passenger car motor oils, and Chevron Oronite as the market leader for marine oils. It listed NewMarket (Afton Chemicals parent corporation) in a weak position for heavy duty diesel oils.

Under driveline and industrial additives, Lubrizol claimed market leadership for gear oil and industrial oils. It didnt list a market leader for automatic transmission fluids, instead indicating Lubrizol, Infineum and NewMarket as all in strong position in that segment.