The quarter ending June 30 saw a decline in operating income at lubricant blender Valvoline compared to the year-earlier period, while sales and operating revenues increased.
Valvoline parent company Ashland said the lube blender reported operating income of $26.1 million for the three months ending June 30 – the third quarter of Ashlands 2008 fiscal year – down 6 percent from $27.9 million in the year-earlier period. Valvolines sales and operating revenues for the quarter increased 5 percent over the same period in 2007, to $428 million, a change attributed largely to price increases.
Valvoline expects to feel the full impact of recent, significant base oil and additive cost increases in the fourth quarter, said Ashland Chairman and Chief Executive Officer James OBrien. We have announced price increases for this business that should fully offset these cost increases and expect to recover the entire amount by the end of the quarter, similar to performance materials. However, the implementation time lag will likely lead to significantly reduced, but positive, earnings for Valvoline in the September quarter as compared with the prior year.
Valvolines total lubricant volume increased 1 percent, which Ashland said stems primarily from the do-it-for-me installer channel and international sales, offset partially by reduced volumes in the do-it-yourself channel.
As a whole, Covington, Ky.-based Ashland reported net income of $72 million, on revenues of $2.2 billion for the quarter.