Lubrizol Corp., parent of Lubrizol Additives, NewMarket Corp., parent of Afton Chemical, and Chevron Corp., parent of Chevron Oronite, all reported strong earnings for their additives segments in the quarter ending June 30, despite pressure from rising raw material costs.
Lubrizol reported that its Lubrizol Additives segments revenues totaled $759 million in the second quarter, a 12 percent increase over the year-ago quarter. The segments operating income (income before certain corporate expenses, interest expense and income taxes) totaled $107 million, up 19 percent from $89.8 million in the second quarter of 2006.
Lubrizol said the Additives segments revenues increased as a result of improvement in the combination of price and product mix, favorable currency of 3 percent and a volume increase of 2 percent. Strong volume growth in Europe and Latin America more than offset volume declines in North America and Asia-Pacific, the company said. However, average raw material costs in the quarter increased 7 percent compared to the second quarter of 2006.
Lubrizol Corp. as a whole reported record revenues of $1.15 billion in the quarter, with consolidated, adjusted earnings from continuing operations of $82 million, or $1.17 per diluted share, compared to earnings of $64.8 million in the year-ago quarter.
Lubrizols James L. Hambrick, chairman, president and CEO, said, Lubrizol Additives performed very well this quarter. We experienced solid gains with our engine additives and fuel additives products. We also achieved good margin recovery in the engine additives product line despite some increases in raw material costs. … The geographic balance of our business helped deliver 2 percent volume growth despite the anticipated lower demand for driveline additives in North America and the impact of order pattern changes in Asia-Pacific.
NewMarket reported that Afton Chemical, its petroleum additives subsidiary, had revenues totaling $338.8 million in the quarter ending June 30, a 4 percent increase over the year-ago quarter. Aftons operating income totaled $36.5 million, a 35 percent jump from $27.1 million in the second quarter of 2006.
The company noted that petroleum additive volumes shipped in the second quarter improved over first-quarter shipments.
NewMarket as a whole reported earnings from continuing operations, excluding special items, of $17.4 million on revenues of $344 million in the quarter ending June 30. Including all items, net income for the quarter was $30.9 million, or $1.78 per share, compared with net income for the second quarter of 2006 of $20.4 million or $1.17 per share.
The improvement in our petroleum additives operating profit comes from a variety of our product lines, said NewMarket President and CEO Thomas E. Gottwald. The results continue to reflect the benefit of our progress in restoring margins through the introduction of new products, including products utilizing more cost-effective solutions for our customers. The results also benefit from price increases implemented in 2006; however upward pricing pressure on several of our key raw materials continues.
While Chevron Corp. does notbreak outfinancialinformation for Chevron Oronite Co., its additives subsidiary, the company did note in its earnings report for the quarter ending June 30 that its chemical operations earned $104 million, up 11 percent from $94 million in the year-ago quarter. Earnings benefited from improved margins in sales of lubricant and fuel additives by the companys Oronite subsidiary. This benefit was partially offset by lower margins on sales by the companys 50 percent-owned Chevron Phillips Chemical Co., the company said.
For the six months ending June 30, however, Chevron reported income from chemical operations of $224 million, down from $247 million in the first six months of 2006.
Lubrizol is headquartered in Wickliffe, Ohio; NewMarket is based in Richmond, Va.; and San Ramon, Calif., is Chevrons home.