Innospec (IOSP) Tops Q4 EPS by 25c, Revenues Beat

Innospec (NASDAQ: IOSP) reported Q4 EPS of $1.62, $0.25 better than the analyst estimate of $1.37. Revenue for the quarter came in at $395 million versus the consensus estimate of $376.6 million.

Commenting on the fourth quarter results, Patrick S. Williams, President and Chief Executive Officer, said,

“We are pleased with our overall performance for the fourth quarter and more importantly, for the full year of 2018. We continued to deliver growth in our portfolio as we managed the expected decline of our Octane Additives business.”

“We set a sales record of $395.0 million for the fourth quarter up 12 percent on last year and $1.48 billion for the full year which is up 13 percent over 2017. We have also been able to manage costs in an inflationary environment, which has resulted in adjusted EPS of $1.62, again a quarterly record for Innospec.”

“As we anticipated, cash flow in the quarter was significantly improved, with an operating cash inflow of $69.8 million. This has resulted in a major reduction of our year end leverage and as of year end we were operating at around 0.5 times adjusted EBITDA.”

“Fuel Specialties had a strong fourth quarter, with good volume growth driving an overall 11 percent improvement in sales. Gross margins were within our expected range but at the lower end. Costs have been well controlled and this business continues to deliver reliable long-term profitability. We have a number of organic growth projects which we believe are progressing very well and we expect they will help deliver further growth in 2019 and beyond.”

“Performance Chemicals sales growth was more in line with the market in the fourth quarter finishing the full year up by 12 percent over 2017. We continue to deliver benefits from our focus on gross margin improvement, which was up 1.7 percentage points on the same quarter last year.”

“Our recent track record of good sales growth continued through the fourth quarter in Oilfield Services despite the pressure on crude oil prices. Sales were up 36 percent for the quarter bringing the full year to a 32 percent improvement over 2017. We also delivered further expansion in gross margin both sequentially and compared to last year. This translated into a substantial increase in operating income, with the full year more than double the figure delivered in 2017.”

“As we previously indicated, Octane Additives received and delivered one order in the quarter and sales were $14.1 million with the full year a little over half of 2017. This has been very much in line with our expectations. The outlook for this business is unchanged and we have no orders on hand, but expect one further order in the first half of 2019.”

For earnings history and earnings-related data on Innospec (IOSP) click here.

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