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NewMarket Corporation (NYSE:NEU) President and Chief Executive Officer, Thomas E. Gottwald, released the following earnings report of the Company’s operations for the first quarter of 2014.
Net income for the first quarter of 2014 was $57.5 million, or $4.43 per share, compared to net income of $67.8 million, or $5.07 per share for the first quarter of last year. Earnings for both the first quarter of this year and the first quarter of last year included the impact of valuing an interest rate swap at fair value, while the first quarter of last year also included income from operations of a discontinued business. Excluding these items, EPS for the first quarter of 2014 was $4.54, compared to $4.97 for the first quarter of last year (see Summary of Earnings table below).
Petroleum additives sales for this year’s first quarter were $574.0 million, up 2.8% versus the same period last year, and shipments were up 5.9%. Petroleum additives operating profit for the quarter was $96.2 million, or 5.7% lower than last year’s very strong first quarter of $102.0 million. Foreign currency exchange had a small unfavorable effect in the first quarter of 2014 versus a larger favorable effect in last year’s first quarter, resulting in a total decrease in operating profit between periods of about $6 million. We also experienced an unfavorable product mix when comparing the two quarters. The operating profit margin for the quarter was 16.8% and the margin for the four quarters ended March 31, 2014 was 16.2%. Both amounts are in line with our expectations of the performance of our business over the long-term.
The effective tax rate this quarter was 31.4% while last year’s first quarter rate was 27.6%. Last year’s rate included the effects of the R&D tax credit for all of 2012 and the first quarter of 2013, as the R&D tax credit extension was not enacted until January 2013. Congress has not yet enacted the R&D tax credit for 2014.