Innospec Earnings Per Share Jump To $1.29 From 52 Cents As Chemicals Profit Climbs 84%
Third-quarter revenue rose 7% to $473.6 million, but operating cash flow fell to $17.4 million and the annual dividend rises to $1.86.
Innospec, the specialty chemicals maker, earned $1.29 per share in the third quarter, up from 52 cents a year earlier, as revenue rose 7% to $473.6 million from $441.9 million. Operating income in its Performance Chemicals unit climbed 84%, the company said Tuesday.
A weak comparison flatters the headline
Net income attributable to Innospec was $31.8 million, against $12.9 million a year ago. The prior-year quarter carried impairment charges on equipment ($18.1 million after adjustment) and intangible assets ($14.0 million), partly offset by a $17.7 million gain on contingent consideration.
Adjusted earnings, which strip out special items, rose less: to $1.29 per share from $1.12. Adjusted EBITDA, a profit measure before interest, taxes, depreciation and one-off items, was $51.4 million versus $44.2 million.
Three segments, three speeds
Innospec makes specialty chemicals for personal care, fuels and oilfields. Performance Chemicals sales rose 6% to $180.5 million, with price and product mix up 12% offsetting a 5% volume decline. Operating income reached $16.9 million from $9.2 million, and gross margin improved 3.7 percentage points to 18.8%.
Fuel Specialties sales rose 5% to $180.7 million, but operating income edged up 1% to $35.6 million. Oilfield Services sales rose 13% to $112.4 million and operating income rose 40% to $6.7 million.
CEO Patrick Williams said Oilfield Services sequential results were lower than expected on activity delays in its legacy Middle East business and elevated raw material costs, but he expects sequential operating income growth in the fourth quarter.
Cash flow slipped as working capital grew
Operating cash flow fell to $17.4 million from $39.1 million a year ago. For the first nine months, it fell to $42.2 million from $77.9 million, as changes in working capital absorbed $87.4 million versus $24.4 million.
The quarter closed with $251.9 million in cash and no debt. Williams said the company has "significant balance sheet flexibility for organic investment, M&A, dividend growth, and buybacks."
The board declared a semi-annual dividend of 94 cents per share, payable November 25 to holders of record on November 17. That brings the annual dividend to $1.86, up 9% from 2025.
Innospec expects to commission plant efficiency upgrades in North Carolina by year-end, which Williams said should raise capacity, productivity and yields on personal care and other products.
Sources
- 8-K Filing — INNOSPEC INC. (IOSP) — SEC EDGAR
- Exhibit iosp-ex99_1.htm — INNOSPEC INC. 8-K exhibit — SEC EDGAR
