NewMarket Q2 2020 Earnings Report
Key Takeaways
NewMarket Corporation reported a decrease in net income for the second quarter of 2020 to $22.3 million, or $2.05 per share, compared to $74.2 million, or $6.63 per share, for the same period in 2019. The decline was primarily driven by a 24% decrease in shipments due to COVID-19 restrictions.
Second quarter results were significantly affected by COVID-19 restrictions.
Second quarter shipments decreased by 24%, leading to revenue and earnings reductions.
The company experienced the lowest point in shipments in May, with some improvement in June, particularly in North America and the Asia Pacific region.
The company is focused on long-term success through investments in capital improvements and research and development.
NewMarket
NewMarket
NewMarket Revenue by Segment
Forward Guidance
The pace of improvement will depend heavily on the rate at which government restrictions are lifted and remain lifted. The company's regions will see varying effects on demand, based on product portfolio, geographic coverage, and differing government responses to the pandemic.
Positive Outlook
- Increased shipments in June.
- Substantial improvements in miles driven in both North America and Western Europe.
- Vehicle production is resuming around the world.
- Chemical industry and our products are recognized as essential for the transportation of goods and services.
- All company locations around the world continued to operate safely throughout the second quarter of 2020.
Challenges Ahead
- Cannot predict how long the downturn will last.
- Regions will see varying effects on demand.
- Dependence on government restrictions being lifted.
- Potential impact on demand based on product portfolio and geographic coverage.
- Differing government responses to the pandemic may cause uncertainty.