The third quarter brought upbeat news for both Ethyl Corp. and Quaker Chemical Corp. Downsized Ethyl reported net income of $12.3 million, up from just $700,000 during the third quarter of 2001. Quakers earnings for the period increased nearly fourfold to $4.3 million.
Ethyl attributed its progress to growth in its petroleum additives business, which has rebounded since the company downsized last year. Recurring third-quarter operating profit from those operations grew to $25 million this year, from $6.2 million last year, partly due to lower materials costs.
Sales of products for engine oils, Ethyls business base, stabilized during the first nine months of the year, and sales of other petroleum additives during that period were up approximately 10 percent from the same period of 2001.
President and Chief Executive Officer Thomas E. Teddy Gottwald said fourth-quarter profits will probably be considerably lower than the third quarters, due to planned plant maintenance, seasonal lulls in orders and rising raw materials costs. Still, he predicted that full-year performance for 2002 will mark a significant improvement over last year.
Ethyl reduced debt by $27 million during the first nine months of the year. It has $285 million of long-term debt due in March but officials said they expect to obtain a one-year extension.
The price of Ethyls stock jumped 25 percent Friday, the day after the earnings announcement, to close at $4.16 per share. Trading activity was so high that the New York Stock Exchange asked the company for an explanation, but Ethyl declined. By yesterday, the stock price had risen to $5.10 per share.
The sharp improvement in Quaker Chemicals results was partly due to the fact that during the third quarter of 2001 it claimed non-recurring charges of $3.7 million for restructuring expenses and to increase reserves for doubtful accounts. Excluding these charges, recurring net income for the third quarter was up 12 percent from the year-ago period.
Sales grew 14 percent to $72.7 million, with more than two-thirds of the increase coming from the acquisitions of United Lubricants and Epmar, and the buyout of its partner in a South Africa joint venture.
Chairman and Chief Executive Officer Ronald J. Naples said the company has increased its market share in its core steel and metalworking markets and expects further growth. The quarterly results also reflected improvement in every geographic region except South America.
Naples predicted similar results for the fourth quarter but cautioned that the future is clouded by rising raw materials costs, problems in the aerospace industry and economic turmoil in South America.