Innospec's (IOSP) Earnings In Line, Revenues Up Y/Y in Q2

Innospec Inc. IOSP recorded a profit of $22.3 million or 90 cents per share in second-quarter 2019, up around 2% from a profit of $21.8 million or 89 cents in the year-ago quarter.

Barring one-time items, earnings came in at $1.12 per share (up from $1.00 per share a year ago), which matched the Zacks Consensus Estimate.

The chemical maker’s revenues rose roughly 1% year over year to $362.4 million in the quarter. The company saw strong sales growth in its Oilfield Services unit.

Innospec Inc. Price, Consensus and EPS Surprise


Innospec Inc. Price, Consensus and EPS Surprise

Innospec Inc. price-consensus-eps-surprise-chart | Innospec Inc. Quote

Segment Highlights

Revenues in the Fuel Specialties segment fell 1% year over year to $133.3 million in the reported quarter as lower volumes and unfavorable currency impact more than offset favorable price/mix. Operating income was $24.1 million, up around 2% year over year.

The Performance Chemicals unit logged sales of $104.7 million, down around 12% year over year, hurt by lower volumes, adverse currency impact and unfavorable price/mix. Operating income rose 13% year over year at $11 million in the quarter.

Revenues in the Oilfield Services division climbed 29% to $122.5 million, aided by improved customer activity, production and stimulation. The segment recorded an operating income of $10.1 million in the quarter, a more than two-fold year over year improvement, driven by the company’s focus on margins and product mix.

The company generated revenues of $1.9 million in its Octane Additives division in the reported quarter, down around 81%. The division registered an operating income of $0.1 million, down from $5.2 million a year ago.

Balance Sheet

Innospec ended the quarter with cash and cash equivalents of $106.1 million, up around 61% year over year. Long-term debt was $136.5 million, down around 34% year over year.

Net cash provided by operating activities was $50 million for the reported quarter versus $2.3 million a year ago.

In the second quarter, Innospec distributed $12.2 million to its shareholders as semi-annual dividend.


Innospec said that it remains on track with its major organic growth projects. The company remains confident about the future based on its strong pipeline of organic growth projects, good fundamentals and opportunities for further growth through acquisitions.  

Price Performance

Shares of Innospec have gained 43.1% year to date, outperforming the industry’s 23.3% decline.


Zacks Rank & Key Picks

Innospec currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include Kinross Gold Corporation KGC, NewMarket Corporation NEU and SSR Mining Inc. SSRM.

Kinross has projected earnings growth rate of 140% for the current year and carries a Zacks Rank #1 (Strong Buy). The company’s shares have surged around 62% in a year’s time. You can see the complete list of today’s Zacks #1 Rank stocks here.

NewMarket has an expected earnings growth rate of 16.2% for the current year and carries Zacks Rank #1. Its shares have gained around 18% in the past year.

SSR Mining has an estimated earnings growth rate of 134.8% for the current year and carries a Zacks Rank #2 (Buy). Its shares have rallied roughly 70% in the past year.

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