Lubrizols additives segment and NewMarkets Afton Chemical additives subsidiary each reported strong increases in operating income for the quarter ending March 31, compared to the year-earlier period.
Lubrizols additives segment on Friday reported operating income of $112.8 million for the first quarter, up 12 percent from $100.9 million in 2007s first quarter. The company attributed the increase to higher volume, favorable currency and contributions from acquisitions completed in 2007. These positive factors partially were offset by higher raw material and operating costs, Lubrizol said.
The Wickliffe, Ohio-based company said additive revenues rose 19 percent to $826.2 million in the first quarter, up from $696 million in the year-earlier period.
Lubrizol Chief Executive Officer James Hambrick said Lubrizol Additives is performing very well. Our performance was attributable to the strength of our new products and technologies, which we believe contributed to our customers success, Hambrick said. We remain focused on sustaining our operating margins that justify our reinvestment in the business.
He noted that Lubrizol last month announced a multi-year capital expenditure plan, which will add incremental capacity sufficient to meet future demand. This action is now warranted because of the improved fundamentals in this business, Hambrick added.
Lubrizols overall net income for the first quarter reached $73.6 million, on revenues of $1.2 billion, or $1.06 per diluted share, up 3.2 percent from net income of $71.3 million, or $1.02 per diluted share, in 2007s first quarter.
Afton Chemicals parent company, Richmond, Va.-based NewMarket Corp., on April 23 said its petroleum additives segment posted a $37.7 million operating profit for the three months ending March 31, up 30 percent from $29 million in the year-earlier period.
The improved results come from several of our product lines, favorable currency impacts, and also include the benefit of a $3.2 million gain on a legal settlement in the first quarter of this year, NewMarket President and Chief Executive Officer Thomas Gottwald said. The settlement was from a class action lawsuit related to raw materials. A NewMarket official told Lube Report the company could not comment on the settlement.
We continued to experience upwards pricing pressure on several of our key raw materials and are pursuing pricing actions in the marketplace to recover these costs, Gottwald continued.
Revenue for the petroleum additives segment in the first quarter totaled $380.6 million, a 24 percent increase from $306.9 million in the year-earlier period.
The growth in sales included the benefit of higher shipments in both the lubricant and fuels operations, favorable currency impacts and somewhat higher selling prices, the company said.
Overall net income for NewMarket reached $19.8 million, or $1.28 per share, in the first quarter, up 22.2 percent from net income of $16.2 million, or 94 cents per share, in the year-earlier period.
Neither Chevron Corp., parent of Chevron Oronite,nor ExxonMobil and Shell, owners of Infineum,issues financial information for their additive businesses.