NASDAQ$IOSP

Innospec Inc · Q2 2022 earnings

Q2 2022 earnings · · Investor relations

Briefing

Innospec's Q2 2022 financial results were reported, showing revenue growth and increased operating income.

Innospec reported a strong second quarter with a 32% increase in revenues and a 25% increase in operating income compared to the same period last year. The company's performance was driven by volume growth and price/mix improvements across all businesses. GAAP EPS was $1.29, and adjusted non-GAAP EPS was $1.58.

  • Revenues increased by 32% compared to the prior year, reaching $467.6 million.
  • Operating income grew by 25% year-over-year, driven by volume growth and price/mix improvements.
  • GAAP EPS was reported at $1.29, while adjusted non-GAAP EPS reached $1.58.
  • Strong demand for personal care chemistries drove margin improvement in Performance Chemicals.

Headline financials

Total Revenue

$468M

Previous: $355M+31.9%
EPS (adj)

$1.58

Previous: $1.30+21.5%
Capital Expenditures

-$17.4M

Previous: -$19.5M+10.8%
Free Cash Flow

$14.9M

Previous: $2.9M+413.8%
Net Income

$32.3M

Previous: $22.4M+44.2%
Operating Income

$46.3M

Previous: $37M+25.1%
Gross Profit

$140M

Previous: $108M+29.1%
Cash & Equivalents

$71.4M

Previous: $94.4M-24.4%
Total Assets

$1.64B

Previous: $1.46B+12.0%
Stock-Based Comp

$1.5M

Previous: $1.3M+15.4%

Revenue & EPS history

Innospec · Revenue · Quarterly

$468M

Q2 2022+31.9%vs Q2 2021
Beat estimate in 7 of 15 quarters(47%)
ActualEstimate

Revenue by segment

Innospec · $299M total across 2 segments · Q2 2022

  • Fuel Specialties
    $176M+23.3%
  • Oilfield Services
    $122M+46.9%

Forward guidance

Innospec expects demand to remain strong in the majority of its businesses entering the second half of 2022. The company believes its businesses are well-positioned to navigate near-term headwinds, including higher interest rates, persistent inflation, and European energy concerns. Oilfield Services continues to have significant growth potential with the target of returning to pre-COVID operating income levels over the medium term.

Tailwinds

  • Demand is expected to remain strong in most businesses.
  • Volumes and capacity additions in personal care are backed by multi-year contracts.
  • Fuel Specialties is expected to be defensive during recessionary times.
  • Cost-saving and sustainability benefits of products align with customer priorities.
  • Oilfield Services has significant growth potential.

Headwinds

  • Higher interest rates
  • Persistent inflation
  • European energy concerns
  • Net cash used in operating activities after capital expenditure was $16.5 million for the quarter, as net working capital increased.
  • Corporate costs for the quarter were $18.5 million, compared with $11.6 million a year ago, up due mainly to higher personnel-related expenses driven by increased share-based compensation and performance related remuneration accruals.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2022

Historical avgQ2 2022

+1.5%

Avg return

Earnings day

+1.1%

Avg return

5 days after

+0.5%

Avg return

30 days after

62%

40 / 65 earnings

Positive

+14.7%

Q3 2024

Best reaction

-8.5%

Q2 2024

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+3.2%-0.8%+1.0%
Q4 2025-0.0%-8.3%-23.5%
Q3 2025+2.4%+3.9%+3.8%
Q1 2025-3.2%-6.0%-7.8%
Q4 2024-7.0%-7.2%-12.6%
Q3 2024+14.7%+11.7%+7.6%
Q2 2024-8.5%-8.2%-6.6%
Q1 2024+4.9%+5.0%+0.9%
Q4 2023-0.5%+3.0%+1.5%
Q3 2023+0.7%+0.8%+9.8%
Q2 2023+0.5%+1.3%-2.3%
Q1 2023+0.6%-1.3%-0.1%
Q4 2022-5.6%-5.1%-14.0%
Q3 2022-1.1%+5.8%+6.8%
Q2 2022-4.2%-7.6%-12.1%
Q1 2022+4.4%+5.4%+10.6%
Q4 2021+8.1%+8.4%+3.5%
Q3 2021+2.2%+3.3%-7.6%
Q2 2021-2.5%+1.0%+4.4%
Q1 2021+1.6%+4.2%+3.5%
Q4 2020-2.4%-0.2%+4.8%
Q3 2020+2.4%+0.6%+23.4%
Q2 2020-0.2%+2.9%-4.1%
Q1 2020+2.3%+5.2%+16.5%
Q4 2019-0.2%-8.4%-37.7%
Q3 2019+9.2%+8.8%+8.9%
Q2 2019+0.8%+2.2%+0.9%
Q1 2019+0.4%-0.3%-2.5%
Q4 2018+5.8%+9.6%+12.3%
Q3 2018+9.9%+8.3%-2.1%
Q2 2018-3.3%-4.5%-2.0%
Q1 2018+2.8%+3.4%+9.9%
Q4 2017+0.8%+2.6%+4.5%
Q3 2017+9.7%+3.6%+10.2%
Q2 2017-4.7%-9.3%-13.3%
Q1 2017-0.8%-2.6%+3.8%
Q4 2016+5.7%+1.9%-9.8%
Q3 2016-6.7%-5.5%+10.2%
Q2 2016+6.6%+16.1%+17.1%
Q1 2016+0.1%
Q4 2015-7.9%
Q3 2015+4.1%
Q2 2015+4.3%
Q1 2015-0.1%
Q4 2014+3.7%
Q3 2014+8.0%
Q2 2014+2.3%
Q1 2014-1.4%
Q4 2013+5.4%
Q3 2013-2.6%
Q2 2013+0.4%
Q1 2013-3.6%
Q4 2012+0.2%
Q3 2012+4.9%
Q4 2011-3.0%
Q2 2012-4.6%
Q1 2011+7.5%
Q1 2012+8.5%
Q4 2009-2.5%
Q3 2010-2.5%
Q3 2011+7.4%
Q2 2011+4.4%
Q2 2010+4.4%
Q4 2010+4.4%
Q1 2010+7.8%

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