NewMarket Corporation

What they do

NewMarket is a holding company for Afton Chemical Corporation, Ethyl Corporation, American Pacific Corporation (AMPAC), Calca Solutions (acquired October 1, 2025), NewMarket Services, and NewMarket Development. Afton develops, manufactures, and sells lubricant and fuel additive packages worldwide, with almost 450 employees in research, development, and testing. AMPAC and Calca make specialty materials for solid rocket motors and high-purity hydrazine for aerospace and defense. Ethyl markets antiknock compounds in North America and provides contracted manufacturing services, and NewMarket Development manages roughly 50 acres of company-owned real property in Richmond, Virginia.

Revenue drivers

• Petroleum additives (Afton) — Lubricant and fuel additive packages sold worldwide; sales were $675.6 million in Q2 2026 and about $1.3 billion in the first half of 2026, representing the large majority of company revenue.
• Specialty materials (AMPAC and Calca) — Solid rocket motor materials and Ultra Pure/high-purity hydrazine for aerospace and defense; sales were $67.2 million in Q2 2026 and $125.3 million in the first half of 2026, with Calca included only from the October 1, 2025 acquisition.
• Antiknock compounds (Ethyl) — Antiknock compound marketing in North America plus contracted manufacturing and related services to Afton and third parties; reported in the 'All other' category rather than as a reportable segment.

Recent performance

Second quarter 2026 net income was $133.8 million, or $14.54 per share, compared to $111.2 million, or $11.84 per share, in the second quarter of 2025. First half 2026 net income was $251.8 million, or $27.14 per share, versus $237.2 million, or $25.11 per share, a year earlier. Petroleum additives Q2 2026 sales were $675.6 million with operating profit of $149.4 million, up from $139.8 million, helped by surcharges implemented in response to higher costs from Middle East supply chain disruptions. Specialty materials Q2 2026 sales were $67.2 million with operating profit of $22.3 million, up from $10.5 million, partly because the 2025 period excluded Calca. Total company net sales for the quarter rose to $747.1 million from $698.5 million.

Strategy

Management says it is investing to expand production capacity for both ammonium perchlorates and high-purity hydrazine to support domestic production of critical aerospace and defense chemicals, with additional capacity expected toward the end of 2026. The company continues to fund capital expenditures, dividends, and share repurchases while reducing leverage; in the first half of 2026 it funded $51.7 million of capital expenditures, paid $55.6 million of dividends, and repurchased over 200 thousand shares for $126.4 million. Petroleum additives surcharges and operational actions taken earlier in 2026 to address higher raw materials, utility, and logistics costs remain in place. Management emphasizes technology investment, cost control, margin management, and strengthening the global manufacturing network.

Risks

• Raw material and input cost volatility — Profitability is sensitive to sudden or prolonged changes in the cost and demand for raw materials such as base oil, polyisobutylene, antioxidants, alcohols, solvents, detergents, friction modifiers, olefins, and copolymers, and the company cannot assure it can pass cost increases through to customers.
• Middle East supply chain disruption — The company cited supply chain disruptions in the Middle East that raised costs and required surcharges and operational actions in petroleum additives, and it continues to monitor the conflict's impact.
• Single-supplier and raw material availability — The company sources some materials from a single supplier, so any significant supply disruption could impair its ability to meet customer demand and ensure continued supply.
• Quarterly variability in specialty materials — Management expects variation in quarterly results for the specialty materials segment on an ongoing basis due to the nature of that business.

Outlook

Management is pleased with both segments' first half 2026 performance and expects the added ammonium perchlorate and high-purity hydrazine capacity to come online toward the end of 2026. It says petroleum additives surcharges and cost actions remain in place and will be adjusted as market conditions evolve. The company plans to keep investing in technology, cost control, margin management, and its global manufacturing network, while monitoring the Middle East conflict, the macroeconomic environment, and changes in international trade relations and tariffs.