(NEU) NewMarket Corporation – Higher Estimates and Solid Momentum

January 23rd, 2010

NewMarket Corporation (NEU) is seeing bullish forecasts ahead of reporting in early February. Analysts polled by Zacks are calling for full-year 2009 earnings of $11.07, an upward revision from $8.37 over the past 3 months.

Company Description

NewMarket Corporation develops, manufactures, blends, and delivers chemical additives that enhance the performance of petroleum products. From custom-formulated chemical blends to market-general additive components, the NewMarket family of companies provides the world with the technology to make fuels burn cleaner, engines run smoother and machines last longer.

Higher Estimates and Solid Momentum

The company is seeing bullish forecasts ahead of reporting in early February. Analysts polled by Zacks are calling for full-year 2009 earnings of $11.07, an upward revision from $8.37 over the past 3 months.

The fourth-quarter Zacks Consensus Estimate of $2.83 per share climbed from $2.19 over the past 90 days.

NewMarket is scheduled to announce fourth-quarter earnings on February 10.

Shares of NEU have soared past the market by more than 250% over the past year.

Favorable Comparisons

The company offers a return on equity (ROE) of 42%, well above the industry average of -1.7%. Its net profit margin of 9% soars past the industry average of -7.4%. Earnings per share are expected to grow 15% over the next 3 – 5 years, versus the industry average expectation of 11%.

A Solid Quarter and Higher Income

The company saw robust third-quarter results and hiked its dividend. Earnings per share of $3.88 soared past the Zacks Consensus Estimate by 81% and came in well above last year’s $1.07.

NewMarket noted that its liquidity position improved significantly during the first nine months of this year with cash increasing to $133.8 million, compared to $21.8 million at the end of 2008.

NewMarket also boosted its dividend by 12.5 cents to 37.5 cents, which was paid out on January 1.

Alex Kolb is the Growth & Income Stock Strategist for Zacks.com. He also writes the popular daily commentary column for the ZacksElite.com service.

Zacks Investment Research

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