NewMarket Corporation (NYSE:NEU) Q1 2018 Earnings Conference Call - Preliminary Transcript
Apr 26, 2018 • 03:00 pm ET
Greetings, and welcome to the NewMarket Corporation First Quarter 2018 Financial Results. At this time all participants are in listen-only mode. A question-and-answer session will follow the (ph) formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Brian Paliotti, Chief Financial Officer for NewMarket Corporation. Thank you. Mr. Paliotti, you may begin.
Thank you, Doug, and thanks, everyone, for joining us this afternoon. With me today is Teddy Gottwald, our Chairman and CEO.
As a reminder, some of the statements made during this conference call will be forward-looking. Relevant factors that could cause actual results to differ materially from those forward-looking statements are contained in our earnings release and our SEC filings, including our most recent Form 10-K.
During this call, we may discuss the non-GAAP financial measures included in our earnings release. The earnings release, which can be found on our website, includes a reconciliation of the non-GAAP financial measure to the comparable GAAP financial measure. We filed our 10-Q this morning, and it will contain significantly more details on the operations and performance of our company. Please take time to review it. I will be referring to the data that was included in last night's release.
Net income was $61 million or $5.14 a share compared to net income of $64 million or $5.39 a share for the first quarter of last year. This is an earnings decrease of 5.2% and an EPS decrease of 4.6% from last year's performance. Petroleum additives operating profit for the quarter was $84 million, which is an $11 million or 12% lower than last year.
Petroleum additives sales for this first quarter of 2018 were $586.9 million, up 8.7% versus the same period last year. The increase in net sales is across all regions with most -- with almost half of the increase from our European region with the other regions contributing about equal amounts of the remaining increase.
Of the $47 million increase in revenue, shipments and product mix contributed $22 million; FX, $16 million; and price was $9 million. Petroleum additives saw record shipments in the first quarter of 2018 with a slight improvement over the same period last year, which are -- which was our prior record for quarterly shipments.
The increase was primarily due to increases in lubricant additive shipments, partially offset by decreases in fuel additives shipments. Latin America and Asia Pacific were the main regions contributing to higher lubricant additive shipments. Europe and Asia Pacific were the primary drivers of the decrease in fuel additives shipments, partially offset by an increase in Latin America.
Regarding profitability in the first quarter, the story is the same as the last several quarters. Raw materials have been rising faster than our selling prices. Raw material costs have been on a prolonged rise throughout the last six quarters, and our margins have been compressed as a result.
Typically, we are able to pass on the increase and recover margins,