IOSP

On August 4, Innospec (NASDAQ:IOSP) reported second-quarter results that pushed revenue up 12% to $491.4 million, with every one of its three businesses posting higher operating income. Net income attributable to Innospec climbed to $30.8 million, or $1.25 per diluted share, up from $23.5 million and 94 cents a year earlier. That headline growth was real, but a look further down the cash flow statement shows a business generating far less cash than its earnings suggest, a gap investors weighing this specialty chemicals maker need to understand. Every segment expanded in the quarter ended June 30. Performance Chemicals revenue rose 9% to $190.3 million, with operating income up 15% to $16.4 million as price and mix gains of 8% more than offset a 2% drop in volumes. Fuel Specialties, the company's largest and most profitable unit, grew revenue 12% to $185.7 million on a 7% volume increase, with margins staying inside management's target range even as the business absorbed input cost pressure. Oilfield Services put up the sharpest turnaround. Revenue jumped 14% to $115.4 million, gross margin expanded 2.7 percentage points to 32.3%, and operating income surged 40% to $8.7 million, a swing the company tied to its recent DRA plant expansion. That kind of margin recovery in a smaller segment can move the needle disproportionately if it continues. Underneath all of it sits a debt-free balance sheet with $250.2 million in net cash. Innospec used part of that cushion to pay its semi-annual dividend of 92 cents per share and repurchase 87,089 shares for $6.4 million in the quarter, continuing a pattern of returning cash to shareholders without adding leverage. The cash flow statement tells a less flattering story. Operating cash flow for the first six months of 2026 fell to $24.8 million from $38.8 million a year earlier, as working capital changes consumed $60.9 million compared with $22.6 million in the prior-year period. Cash and equivalents dropped to $250.2 million at quarter-end from $292.5 million at the start of the year, even before the dividend and buybacks funded from that balance are counted. Margins also moved the wrong way in two of the three segments. Fuel Specialties gross margin fell 1.5 percentage points to 36.6%, and Performance Chemicals slipped 0.2 percentage points to 17.3%, both despite revenue growth, meaning higher costs are eating into some of that top-line gain. Zoom out to six months and adjusted EBITDA actually declined to $93.8 million from $103.1 million a year ago, a reminder that one strong quarter followed a weaker start to the year rather than a clean acceleration. Performance Chemicals volumes fell 2% even as revenue grew, so that segment's gain came entirely from price, mix, and currency rather than more product moving out the door. Management said repairs and process upgrades at its North Carolina plant are still underway, work it expects to translate into further improvement only in the second half of the year. Hedge fund ownership held steady at 34 funds in the most recent quarter, unchanged from the prior quarter, which points to institutional conviction that neither built nor faded. Short interest sits at just 2.62% of the float, a level that signals little organized skepticism toward the stock. Innospec trades at a forward P/E of 14.47 as of September 2, a modest multiple for a company that just posted double-digit operating income growth. Innospec's second quarter shows a company where the underlying businesses, especially Oilfield Services, are executing well, and management says further improvement is still to come in the back half of the year. But the six-month numbers on cash flow and adjusted EBITDA complicate a headline that looked clean on its own. For the growth story to hold up, working capital needs to turn from a $60.9 million drag into a source of cash, and the North Carolina plant work needs to show up in Performance Chemicals margins rather than just volume. While we acknowledge the potential of IOSP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In. Disclosure: None. Follow Insider Monkey on Google News.

A month has gone by since the last earnings report for Innospec (IOSP). Shares have added about 2% in that time frame, outperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Innospec due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers. Innospec reported second-quarter 2026 adjusted earnings of $1.27 per share, up 0.8% year over year. The figure beat the Zacks Consensus Estimate of $1.05 by 21%.Net income (as reported) attributable to Innospec rose to $30.8 million or $1.25 per share from $23.5 million or 94 cents a year earlier. Revenues rose 11.8% year over year to $491.4 million and surpassed the consensus estimate of $462.4 million. Growth was supported by all three businesses.Total operating income increased 15.7% year over year to $39.7 million. Adjusted EBITDA rose 2% to $50.1 million. Gross profit increased to $138.3 million from $123.2 million a year ago, reflecting the higher sales base and contributions across the operating businesses. Performance Chemicals revenues increased 9.5% year over year to $190.3 million. A 2% volume decline was more than offset by an 8% positive price/mix contribution and a 3% favorable currency impact.The segment's gross margin edged down 0.2 percentage points to 17.3%. Operating income rose 14.7% to $16.4 million as operating leverage improved. Management said repairs, process improvements and upgrades at its North Carolina plants continued during the quarter.Fuel Specialties revenues climbed 12.5% year over year to $185.7 million. Volumes increased 7%, price/mix contributed 3% and currency added 2%, providing a balanced mix of growth drivers.Gross margin declined 1.5 percentage points to 36.6%, but operating income increased 2.5% to $36.3 million. Management said margins remained within its target range despite the year-over-year contraction.Oilfield Services revenues rose 14.5% year over year to $115.4 million. The business benefited from Innospec's recent DRA plant expansion and growing opportunities to supply the technology to customers.Operating income increased 40.3% to $8.7 million. Management also remained focused on growth and margin improvement in its U.S. and Middle East completions and production operations. Cash provided by operating activities was $7.2 million in the quarter compared with $10.5 million a year ago. Capital expenditures totaled $16.5 million. Management expects operating cash flow to increase in the second half as working capital efficiency improves.Innospec ended June with $250.2 million in cash and cash equivalents and no debt. The debt-free position leaves the company with flexibility to fund organic investment and potential acquisitions.During the quarter, Innospec paid a semi-annual dividend of 92 cents per share and repurchased $6.4 million of common stock. Management also highlighted dividend growth and buybacks among its capital-allocation options alongside investment in the business. Management expects Performance Chemicals to benefit from ongoing plant repairs, process improvements, upgrades and additional topline and margin opportunities. These actions remain central to the company's plan for better second-half performance.For Oilfield Services, Innospec expects its DRA expansion and opportunities in completions and production to support further sequential gains. Fuel Specialties, meanwhile, is expected to continue advancing opportunities across its established and newer end markets. The company continues to pursue opportunities across traditional fuel, renewable fuel and non-fuel applications. The company remains focused on technology development, topline growth and margin improvement across the portfolio. Management's outlook calls for further operating progress while preserving balance-sheet flexibility for investment and shareholder returns. It turns out, estimates revision have trended upward during the past month. At this time, Innospec has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for value investors. Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Innospec has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months. Innospec belongs to the Zacks Chemical - Diversified industry. Another stock from the same industry, Methanex (MEOH), has gained 16.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. Methanex reported revenues of $1.4 billion in the last reported quarter, representing a year-over-year change of +75%. EPS of $3.87 for the same period compares with $0.97 a year ago. Methanex is expected to post earnings of $3.10 per share for the current quarter, representing a year-over-year change of +5066.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +14.6%. Methanex has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Innospec Inc. (IOSP) : Free Stock Analysis Report Methanex Corporation (MEOH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 10 a.m. ET General Counsel and Chief Compliance Officer - David Bentley Jones President and Chief Executive Officer - Patrick S. Williams Executive Vice President and Chief Financial Officer - Ian Philip Cleminson Operator: Thank you. Welcome to Innospec's Second Quarter Earnings call. David Bentley Jones: This is David Bentley Jones, and I am Innospec's General Counsel and Chief Compliance Officer. Earnings release for the quarter and this presentation are posted on the company's website. During this call, we will make forward looking statements, which are predictions about future events. These statements are based on current expectations and assumptions that are subject to risk and uncertainties that could cause actual results to differ materially from the anticipated results implied by such forward looking statements. The risks and uncertainties are detailed in Innospec's filings with the SEC. Please see the SEC site and Innospec site for these and related documents. In today's presentation, we have also included non GAAP financial measures. A reconciliation to the most directly comparable GAAP financial measure is contained in the earnings release. The non GAAP financial measures should not be considered as a substitute for or superior to those prepared in accordance with GAAP. They are included as additional items to aid investor understanding of the company's performance and to the impact these items and events had on financial results. With me today from Innospec are Patrick S. Williams, president and chief executive officer and Ian Philip Cleminson, executive vice president and chief financial officer. And with that, I will turn it over to you, Patrick. Patrick S. Williams: Thank you, David. Welcome everyone to Innospec's second quarter 26 conference call. This was a strong quarter for Innospec with all businesses contributing to double digit sales and operating income growth. Performance Chemicals operating leverage drove a 15% operating income increase over last year. In North Carolina, we continue to prioritize plant repairs and process improvements which will drive long term benefits. In parallel, are commercializing new technologies in all end markets and targeting further margin improvement opportunities across the business. We expect these combined efforts to drive further improvement in the second half of 2026. Fuel specialties had another strong quarter, delivering revenue and operating income growth with margins in our target range. Volume and price mix improved as the business continued to achieve consistently strong results through a range of economic cycles. While there may be some margin headwind in the sequential quarter, because of the lag between pricing and cost inflation, we expect a continued strong performance. Oilfield Services operating income in March improved sequentially and on the prior year driven by recent DRA plant expansion and growing opportunities for this technology in the markets we serve. However, performance is below our expectations and our completions and production business where opportunities remain for growth and margin improvement. Furthermore, our Middle East business is positioned for growth as onshore completions activity levels recover. We are confident that these combined efforts will drive further sequential improvements in the second half of 2026. Now I will turn the call over to Ian Cleminson will review our financial results in more detail. Then I will return with some concluding comments. After that, Ian and I will take your questions. Ian? Ian Philip Cleminson: Thanks, Patrick. Turning to slide 7 in the presentation. Company's total revenues for the second quarter were $491.4 million a 12% increase from $439.7 million a year ago. Overall gross margin increased by 0.1 percentage points from last year, to 28.1%. Adjusted EBITDA for the quarter was $50.1 million compared to $49.1 million last year, and net income attributable to Innospec for the quarter was $30.8 million compared to $23.5 million a year ago. Our GAAP earnings per share were $1.25 including special items, the net effect of which decreased our second quarter earnings by $0.02 per share. A year ago, we reported GAAP earnings per share of $0.94 which include the negative impact from special items of $0.32 per share. Excluding special items in both years, our adjusted EPS for the quarter was $1.27 compared to $1.26 a year ago. Turning to slide 8, revenues in Performance Chemicals for the second quarter. were $190.3 million up 9% from last year's $173.8 million Volume reductions of 2% were offset by a positive price mix of 8% and a favorable currency impact of 3%. Gross margins of 17.3% decreased 0.2 percentage points compared to 17.5% in the same quarter in 2025. Operating income of £16.4 million increased 15% from $14.3 million last year. Moving on to Slide 9. Revenues in Fuel Specialties for the second quarter were $185.7 million up 12% from the $165.1 million reported a year ago. Volumes were up 7%, with price mix up 3% and a positive currency impact of 2%. Pure Specialties gross margins of 36.6% decreased 1.5 percentage points compared to 38.1% in the same quarter last year. On a weaker sales mix. Operating income of £36.3 million was up 3% from $35.4 million a year ago. Moving on to Slide 10. Revenues in oilfield services for the quarter were $115.4 million up 14% from the $100.8 million reported a year ago. Gross margins of 32.3% increased 2.7 percentage points from last year's 29.6% on an improved sales mix. Operating income of $8.7 million increased 40% from $6.2 million 1 year ago. Turning to Slide 11. Corporate costs for the quarter were $21.6 million compared with $20.9 million a year ago. The effective tax rate for the quarter was 25% compared to last year's 26%. Moving on to slide 12. Cash from operating activities was $7.2 million before capital expenditures of $16.5 million In the second quarter, we bought back just over 87 thousand shares at a cost of $6.4 million. As of June 30, Innospec had $250.2 million in cash and cash equivalents and no debt. And now I will turn it back over to Patrick for some final comments. Patrick? Patrick S. Williams: Thanks, Ian. With our diversified global supply chain and manufacturing footprint, our teams continue to manage through the direct impacts of geopolitical disruption delivering in sales, margin and operating income improvements. We remain focused on security of supply and innovative solutions for our customers. We will continue to implement improvements across all our businesses that will position us for further growth and margin improvement. Our short term expectations are for further operating income growth in Performance Chemicals and Oilfield Services in the second half of 26, and steady performance in fuel specialties. Our strong debt free balance sheet continues to allow for significant flexibility in the current environment to pursue further organic investment, M&A, dividend growth and buybacks. Operating cash generation was again positive in the quarter, and our net cash position closed at over $250 million Our teams are focused on opportunities to improve working capital efficiency and we expect these actions will support increased operating cash flow the second half of 26. This quarter, we continued our record of returning value to shareholders with our semiannual dividend of $0.92 per share, and $6.4 million in share repurchases. Now I will turn the call over to the operator and Ian and I will take your questions. Operator: 1 and wait for your name to be announced to withdraw your question. Please press 1-1 again. We are now going to proceed with our first question. And the questions come from the line of Mike Harrison from Seaport Research Partners. Please ask your question. Michael Harrison: Hi. Good morning. Morning. First question is on the Performance Chemicals business. I was hoping you could give us an update on the repair and upgrading process at your facilities. Would you say that is mostly complete at this point, or where do we stand on that? Patrick S. Williams: Mike, I would say it is Patrick. I would say we are probably about 60% of the way through it. We have still got some minor repairs and now it is due into a more pipe work for more expansion. But we are getting close. I think by the end of Q4, we should be fully repaired and fully optimized at that point. Michael Harrison: Alright. And then, in terms of just what you are seeing in the pricing versus raw material realm on performance chemicals that the price mix there was up 8%. Did that keep pace with raw material cost inflation that you saw in the quarter? And I guess, it looks like some of the OLEO chemicals are coming a little bit lower Is that something that is helping to maybe provide a little bit of margin benefit Yeah. Ian Philip Cleminson: Mike, it is Ian. The team has done a really good job, with keeping up with the price increases. They have been pretty creative around the edges as well about putting new formulations into customers hands. Where we would need to set price action we have, and you can see year over year that the margins are pretty comparable and they have obviously been improved sequentially over Q1 as well. So we are seeing price inflation. We are handling it pretty well at the moment. And we continue to expect to be able to handle it and we will pass through where we need to. So the markets are pretty choppy at the moment. Prices are moving up and down pretty rapidly. But we have got a good handle on it and the team are doing well. Michael Harrison: Alright. And then similar question on fuel specialties. I think that gross margin number for Q2 came in maybe a little bit better than you had anticipated. But it sounds like maybe you are anticipating some margin pressure sequentially into Q3. Can you give us a little bit of sense of how you are seeing the raw material flow through and that contractual pricing pass through mechanism? Ian Philip Cleminson: Yes. Sure, Mark. it is Ian again. You know, in fuels, we have the sort of pricing lag up and down. Fuels is mostly crude derivatives based. So the team again, chasing prices up at the moment. You have seen a little bit of margin compression in Q2, Some of that is pricing, but some of that is also sales mix in the quarter. We are actually quite pleased with what the team have done there. They are on top of it. As we move into Q3, I would expect a little bit more pressure on the gross margins because of the lag But again, there is nothing here that is really concerning us. it is a well trodden path The team are well versed in what they need to do and the market is responding correctly to our actions. So we are in good shape. So I think as we move through Q3 and into Q4, we are hopeful that if we get stability in prices, we will start to see some stability in margins. Michael Harrison: Alright. Thanks for that. And then last question for me is just on the oilfield business. I was hoping you could give some additional detail on what you are seeing in the drag reducing agent Portion of that business. It sounds like you guys have added capacity and you have started to see some good uptake of that additional capacity. But how much growth are you seeing in that business overall? And how much of that is coming in The Middle East as a result of some of the, I guess, crude logistics, issues they are facing, in the wake of the Iran war. Patrick S. Williams: Yeah. So we added capacity in the majority of that capacity is almost sold out. We added new customers in North America. But again, as you just alluded to, we have shipped a lot to The Middle East. More importantly for the East West pipeline and other pipelines that go along that corridor. I have always said, and we said it in the last quarter, that where there is chaos, there is opportunity. And we see this as not just a short term fix. We think that they are going to move more products to that pipeline over time. Even if the Strait of Hormuz are open in the near term. And so our product is extremely good product. And I think that it is been taken very well. in The Middle East. And we will continue to ship products as we go. There is another opportunity for us to do another expansion of DRA down the road and that is being discussed as we speak. Alright. Thanks very much. Operator: Thank you. Thank you, man. We are now going to proceed with our next question. And the questions come from the line of David Silva from Freedom Capital Markets. Please answer your question. David Silver: Thanks very much. I will apologize. I think my feed was cutting in and out just a little bit. So apologies if I make you repeat yourself here. I would like to go back to my question about the work done in your with your performance chemicals facilities in the wake of the unplanned outages and the disruptions earlier this year. So, Patrick, you did mention that the work the discretionary upgrading work should be done by the end of the year. And on a qualitative basis, I mean, have you guys kind of thought about what or what kind of benefits should we expect to result from, you know, the project once it is complete? Is it capacity-related? Is it efficiency-related? Just what kind of benefits and, you know, if you could ballpark them, that would be great. Thank you. Patrick S. Williams: Yeah. David, Sure, David. The number 1 priority was to get the plant repairs up and moving so we could provide products to our customers. That was number 1 priority on our list. And we have accomplished that. We still have a ways to go. We are still tight. But I think as these efficiencies come on, it will give us more capacity. It will give us better yield rates. And it will also improve safety, everything along that plant that we needed to improve. it is hard to put a number on yet on how much volume it is going to help increase. But it is a pretty good it is a pretty good number that we are looking at probably north of 10% at least. Moving forward for next year, 10% on capacity, that is. David Silver: Is that correct? Patrick S. Williams: Yeah. Yep. David Silver: Great. Thanks. Thank you for that And I did want to kind of go back to oilfield and, you know, maybe just pick your brain, Patrick, for your approach to, you know, investing and taking advantage of some opportunities. So you certainly touched on the DRA opportunity emerging in The Middle East You know, what do you sense you know, the opportunities are or how you wanna be positioned you know, in the in the shale basins here. In other words, you know, will production be structurally higher for some period of time because of you know, the geopolitics, as you mentioned, or you know, are we still in kind of a phase where the industry is a little more careful with their CapEx than maybe they have been in the past. But what are the broader you know, opportunities in the global oil market beyond, you know, DRAs in The Middle East? Patrick S. Williams: Yeah. I mean, you can follow the rig count and see it has not spiked like you thought it would. And we have always said that E and P companies are taking a more disciplined approach now. But you have to remember, you have longer laterals, more stages, so you are getting more volume of oil through well than you have in the past. So there is really not a need to have a large uptick on drilling. But what we are seeing is still a very disciplined approach by E and P companies. And we just have to be prepared with new technologies, which we should be launching here within the next 6 months that will help us propel in that area. As well as other areas like South America and Mexico. And we are watching things over in Mexico. We are seeing some things start to turn. And hopefully we will have some opportunities there over the next 6 months. David Silver: Oh, wow. Mexico I was not expecting that. Okay. Interesting. You know, maybe just to go back to fuel specialties. I mean, the revenues were up you know, double digits. Operating income was up, you know, 3%. So there was, you know, some margin effect there. Was that all due to raw material costs? Or was there kind of a notable mixed effect And then more broadly, it seems like that segment is on track for another record year just wondering if you had any had any thoughts about that record revenue and operating income. Thank you. Ian Philip Cleminson: Yeah. Let me take that 1, David. it is Ian. So as we said previously to Mike, the gross margin compression that we saw year over year, most of that was from sales mix. There was a little bit of pricing in there. But most of it was the mix at the top line. And the businesses progressing really nicely as you said. So at the half year point, is pretty much where we expected it to be. We expect the business in Q3 to be a very similar set of results to what we did in Q2. Then we are into the winter season. So the business is very well set for a very strong second half of the year. And that is built on great technology great service to the customers, a really dedicated team that is out there executing day in and day out. And we are really pleased with where they have got to So yeah, they are all well set. it is not easy. But they will drive really hard for a record year. Okay. David Silver: And then last from me, and this is kind of a big picture question. But you know, your results were very strong here in absolute terms. But I think even in relative terms, you know, you surprised me. And I guess the consensus a little bit in terms of your ability to produce and ship you know, in the wake of the, disruption that you suffered in the first quarter. Maybe just to comment on how you were able to kind of reposition or react so effectively and seemingly, not miss a beat in terms of shipments and, you know, driving revenue growth, I think, across your businesses, you know, several of which you know, did suffer some mechanical disruptions. So, you know, just broadly speaking, is there a lot of flexibility inherent in your system? And you know, is there still a lot of flexibility, you know, assuming you are producing at, you know, the 2Q level? Or is that something that incremental growth might have to be addressed through additional you know, CapEx or other types of resourcing. Patrick S. Williams: No. I think I think we first have to give credit to the management team and the individuals at the plant I mean, this has been a very, very difficult process for us to go through. You had winter storm hit. We found out a lot of weaknesses within the system. We worked night and day, 7 days a week to get it fixed, to make sure we are not missing load to customers. And that is been very difficult without claiming a force majeure. So we fought our way through that. I think, as I said earlier, the efficiencies that are coming about and coming through now that will hit the fourth quarter, is going to give us additional capacity without more CapEx once we spend this original CapEx. So we are in a really good position. I think that you will see over the coming quarters, you will see improvements. We could have had some nice volume improvement in the quarter, but we just could not make it. We were at capacity. So I think we will start seeing volume improvements as the quarters come. But it is been a lot of work, David. And I got to give credit to where credit's due is we put ourselves in this position, but we fought like hell to get out of it. And we are not gonna ever go there again. But we are sitting in a good spot. We can see the light at the end of the tunnel. And we are very confident moving forward. Okay. Operator: Great. I appreciate all the color. Thank you. Thanks, David. Thanks, David. Thank you. We are now going to proceed with our next question. And the questions come from the line of John Tanwanteng from CJS Securities. Please ask your question. Jonathan Tanwanteng: Hi, good morning. Thank you for taking my questions and really nice quarter. Good morning, John. Thank you, John. Good morning. I was wondering if you could quantify the impact in Q2 from the repair and upgrade activity And it sounds like you are taking a little bit longer to get back where you want to be. What do you think you might be leaving on the table in heading into Q3 and maybe Q4? And Do you make it up on the back end when things are up and running, or are those sales gone? Ian Philip Cleminson: Yeah. Let me take that first, John, and then Patrick will come over the top a little bit. As Patrick alluded to on previous questions, we were really supply constrained in Q2. We got as much volume out of North Carolina as we could. There could have been more in there. Our expectation is that broadly Q3 will be very similar to Q2 with the cross performance chemicals. That volume, additional volume, the additional capacity will not really come on till Q4 at the earliest, probably more likely into Q1 next year. So I think you are gonna see us I do not mean plateaued, it is probably the wrong word, but I think we are probably operating towards top end of what we are capable of now. So I think Q3 will be very similar. Q4 might see a little bit more of an uptick sequentially. Well, that is sort of how we see it right now. Patrick S. Williams: Yeah. I think as we said, John, it is the number 1 priority was to get that plant up and running to meet the volumes contractual volumes that we had in place. And we have done that. And now it is more putting better efficiencies in place so that we can increase yields and increase volume moving forward. And as Ian said, I think you will see that towards the latter part of Q4 and then for sure in Q1. Jonathan Tanwanteng: So we have missed some volume Will we pick some of that back up in Q4, Q1 next year? Yes. But you will not pick it up in Q3. Okay. Great. Thank you. And then I was wondering if you could go into a little bit more detail on just the improved price and mix in this segment. Ian Philip Cleminson: I think you called out that, you know, you are doing a good job in getting you formulations customers. but could you go into a little more detail on where exactly you are winning what is driving that, and kinda how sustainable that is as you get more capacity online? Are you asking, John, about in the future or are asking about Q2? Jonathan Tanwanteng: Both. Both. Ian Philip Cleminson: Okay. So yeah. We did a good job on pricing in Q2 in Performance Chemicals. The mix was pretty flat year over year. And I think sequentially, obviously, the winter storm impacts Q1, so it is not a really good comparison. Because of the volume interruptions that we had. As we move into Q3, our expectation is that the business will continue to manage pricing potentially swap out some formulations with customers where we can, But where we cannot, we will take pricing action. I do not think we will really see the benefit of the improvements that we are making until part of Q4, early 2027, because just will not have the capacity, John, to change the sales mix and the profile there. Additionally to that, we are also expecting new products to come online as well, which will help the margin profile. But I think overall, the way we are managing raw materials you will see us do the same again in Q3. that is what we have done in Q2. that is responsibly manage it through our customers and through our supply chains. Patrick S. Williams: Yeah. Just to add a little color to Ian's comments. In all of our businesses, we have had to manage extremely tight timelines on raw materials. You know, there is been force majeure on some raw materials, so we have had to reformulate away. there is been a tightness in the market in general. And timing of shipments has been extremely difficult. So our supply chain, our management team, and all the businesses have done a really good job dealing with not only the inflationary pricing, but obviously the tightness of the market. So we are we are you know, we feel confident that we have a handle on it. And I think that, you know, we will just continue to see those general improvements as we move forward. Jonathan Tanwanteng: Great. Thank you. And then I think you mentioned earlier that you have some confidence that Mexico might come back later this year. I was wondering if you could just talk about the what is going on there, and if you can size or time the, ramp up of potential, return of business there. Patrick S. Williams: Yeah. it is, you know, it is interesting. there is you know, they have had some public announcements about spending capital in certain areas. Some was on polyethylene, some was on crude, some was on nat gas plants. Petrochemical plants. that is filtering through now to saying that they realized they actually need now's the time that the country needs to get more crude out of the system. it is never going to be what it was. I think technology is changing a little bit. But it is gonna be a slow process. You know, as we always told you, we are not going to sell products that we are not gonna get paid on for 6 months to a year. And so until that environment changes, we are just going to slow play it. But in saying that there is opportunities, we have had some people come to us and said, we have got opportunities. Here's our payment. it is not large volumes. I do not think you will see any effect this year. We are not counting on it even for next year. If it comes, it comes. So it is more putting ourselves in a position that when they have to return back to using chemicals, that were 1 of their first choice. And that is what we are doing. But we are just seeing we are seeing more activity and having more conversations. Jonathan Tanwanteng: Got it. No. that is helpful. Just to be clear, they are not reaching out to you as opposed to just waiting for something to happen. Correct. Operator: Got it. Thank you. Thank you. Thanks, John. We have no further questions at this time. So I will now hand back to you to Patrick S. Williams for closing remarks. Patrick S. Williams: Thank you. Thank you all for joining us today, and thanks to all our shareholders customers, and Innospec employees for your interest and support. If you have any further questions about Innospec or matters discussed today, please give us a call. We look forward to meeting up with you again to discuss our third quarter 26 results in November. Have a great day. Operator: These concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you. Before you buy stock in Innospec, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Innospec wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* Now, it’s worth noting Stock Advisor’s total average return is 958% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Innospec (IOSP) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. Innospec stock has climbed 21.2% year to date, yet the latest valuation work suggests the current share price may still sit below an intrinsic value estimate based on a Discounted Cash Flow model, while broader checks point to a more mixed picture. The 21.2% year to date return raises the question of whether recent buyers are already paying up or still getting Innospec at a discount. Recent profit growth and a debt free balance sheet can support the equity story, but any slowdown in segment performance or weaker cash generation may weigh on what investors are willing to pay. The stock scores 4 out of 6 on the broader valuation checks, which indicates a mixed picture rather than a clear bargain or clear overvaluation, and you can see the breakdown on this valuation summary. The key question now is whether Innospec's current price around US$92 already reflects that intrinsic value estimate or still leaves a reasonable margin for valuation upside. Innospec delivered 16.2% returns over the last year. See how this stacks up to the rest of the Chemicals industry. The Discounted Cash Flow (DCF) model estimates what Innospec is worth today based on the cash it is expected to generate for shareholders. For Innospec, the model starts with the latest twelve-month free cash flow of about $55.2 million and assumes that cash generation continues to grow rather than contract over time. Those projected cash flows are then discounted back to today to reflect the risk and time value of money. On this basis, the DCF indicates an intrinsic value of about $129 per share, compared with the current price around $92. That gap suggests the stock screens roughly 28.4% undervalued. The recent Q2 2026 results highlighted solid cash generation alongside a debt-free balance sheet, so the current discount indicates the market may not be fully reflecting that cash flow profile in the price. Overall, the Discounted Cash Flow assessment suggests Innospec stock currently appears undervalued relative to its estimated intrinsic value. Our Discounted Cash Flow (DCF) analysis suggests Innospec is undervalued by 28.4%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Innospec. The P/E multiple suits Innospec because earnings are a key focus for many investors in chemicals. At around 18.7x earnings, Innospec trades below the broader Chemicals industry average P/E of about 29.7x and also below the peer group average near 50.1x. That already places the stock at a discount to many listed peers in the sector. A more tailored yardstick is the modelled fair P/E ratio of about 17.3x, which reflects Innospec's specific mix of growth, profitability, size and risk. The current 18.7x level sits only slightly above that fair multiple, so the stock does not screen as especially cheap or stretched on earnings despite its recent share price gains and Q2 2026 results. Overall, Innospec appears roughly fairly valued based on its current P/E multiple. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives pick up where the valuation puzzle for Innospec leaves off. They spell out what kind of future for growth, margins and earnings would need to hold for the stock to be worth materially more or less than today’s price on the Community page. Instead of a single ratio or model output, they set out the underlying assumptions so you can follow whether that story continues to match Innospec's actual progress over time. If you have a numbers based view on whether Innospec's recent earnings beat and segment performance really support today's price, add your Narrative to the Simply Wall St community and set out the case in your own words. It is a chance to put a clear framework around your expectations now and then see how that thesis stacks up as new results are released. Do you think there's more to the story for Innospec? Head over to our Community to see what others are saying! For Innospec, the Discounted Cash Flow (DCF) work points to an intrinsic value that sits above the current share price, while the market multiple view sits closer to about right. That mix fits with the broader valuation checks, which are constructive but not overwhelmingly strong. The crux from here is whether Innospec can keep converting its operations into consistent cash flows that support the intrinsic value case without a material slip in segment performance. If that happens, today’s pricing may look conservative. If not, the present discount may simply reflect justified caution. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include IOSP. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Innospec Inc. IOSP reported second-quarter 2026 adjusted earnings of $1.27 per share, up 0.8% year over year. The figure beat the Zacks Consensus Estimate of $1.05 by 21%.Net income (as reported) attributable to Innospec rose to $30.8 million or $1.25 per share from $23.5 million or 94 cents a year earlier. Revenues rose 11.8% year over year to $491.4 million and surpassed the consensus estimate of $462.4 million by 6.4%. Growth was supported by all three businesses.Total operating income increased 15.7% year over year to $39.7 million. Adjusted EBITDA rose 2% to $50.1 million. Gross profit increased to $138.3 million from $123.2 million a year ago, reflecting the higher sales base and contributions across the operating businesses. Innospec Inc. price-consensus-eps-surprise-chart | Innospec Inc. Quote Performance Chemicals revenues increased 9.5% year over year to $190.3 million. A 2% volume decline was more than offset by an 8% positive price/mix contribution and a 3% favorable currency impact.The segment's gross margin edged down 0.2 percentage points to 17.3%. Operating income rose 14.7% to $16.4 million as operating leverage improved. Management said repairs, process improvements and upgrades at its North Carolina plants continued during the quarter.Fuel Specialties revenues climbed 12.5% year over year to $185.7 million. Volumes increased 7%, price/mix contributed 3% and currency added 2%, providing a balanced mix of growth drivers.Gross margin declined 1.5 percentage points to 36.6%, but operating income increased 2.5% to $36.3 million. Management said margins remained within its target range despite the year-over-year contraction.Oilfield Services revenues rose 14.5% year over year to $115.4 million. The business benefited from Innospec's recent drag-reducing agent (DRA) plant expansion and growing opportunities to supply the technology to customers.Operating income increased 40.3% to $8.7 million. Management also remained focused on growth and margin improvement in its United States and Middle East completions and production operations. Cash provided by operating activities was $7.2 million in the quarter compared with $10.5 million a year ago. Capital expenditures totaled $16.5 million. Management expects operating cash flow to increase in the second half as working capital efficiency improves.Innospec ended June with $250.2 million in cash and cash equivalents and no debt. The debt-free position leaves the company with flexibility to fund organic investment and potential acquisitions.During the quarter, IOSP paid a semi-annual dividend of 92 cents per share and repurchased $6.4 million of common stock. Management also highlighted dividend growth and buybacks among its capital-allocation options alongside investment in the business. Management expects Performance Chemicals to benefit from ongoing plant repairs, process improvements, upgrades and additional topline and margin opportunities. These actions remain central to the company's plan for better second-half performance.For Oilfield Services, Innospec expects its DRA expansion and opportunities in completions and production to support further sequential gains. Fuel Specialties, meanwhile, is expected to continue advancing opportunities across its established and newer end markets. The company continues to pursue opportunities across traditional fuel, renewable fuel and non-fuel applications. The company remains focused on technology development, topline growth and margin improvement across the portfolio. Management's outlook calls for further operating progress while preserving balance-sheet flexibility for investment and shareholder returns. Shares of Innospec have gained 12.4% in the past year compared with the Zacks Chemicals Diversified industry’s 6.1% rise. Image Source: Zacks Investment Research IOSP currently carries a Zacks Rank #2 (Buy).Other top-ranked stocks in the Basic Materials space are Almonty Industries Inc. ALM, Neo Performance Materials Inc. NOPMF and Skeena Resources Limited SKE. Almonty is expected to report second-quarter results on Aug. 13. The Zacks Consensus Estimate for ALM’s second-quarter earnings is pegged at 10 cents per share. It carries a Zacks Rank #2 at present. NOPMF is slated to report second-quarter results on Aug. 11. The Zacks Consensus Estimate for earnings is pegged at 50 cents per share. NOPMF has a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. Skeena Resources is expected to report second-quarter results on Aug. 13. The Zacks Consensus Estimate for SKE’s second-quarter loss is pegged at 11 cents per share. It currently carries a Zacks Rank #2. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Innospec Inc. (IOSP) : Free Stock Analysis Report Skeena Resources Limited (SKE) : Free Stock Analysis Report Almonty Industries Inc. (ALM) : Free Stock Analysis Report Neo Performance Materials Inc. (NOPMF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Innospec Inc.? Here are five stocks we like better. Strong second-quarter results: Revenue increased 12% to $491.4 million and net income rose to $30.8 million, with all three segments posting double-digit sales growth. Oilfield Services led operating-income growth at 40%, while Performance Chemicals and Fuel Specialties increased 15% and 3%, respectively. Performance Chemicals remains supply constrained: Repairs and optimization at the North Carolina facilities are about 60% complete, with full completion expected by the end of the fourth quarter. Additional capacity is unlikely before late Q4 2026 or, more likely, Q1 2027, potentially raising capacity by more than 10% next year. Outlook remains positive: Management expects further operating-income growth in Performance Chemicals and Oilfield Services, steady Fuel Specialties performance, and stronger cash flow in the second half. Innospec ended the quarter with $250.2 million in cash, no debt, and continued flexibility for investment, dividends, acquisitions and share repurchases. Innospec (NASDAQ:IOSP) reported higher second-quarter revenue and net income as all three operating segments posted double-digit sales growth and operating-income gains, while the company continued repair and optimization work at its North Carolina Performance Chemicals facilities. Total revenue rose 12% to $491.4 million in the second quarter of 2026, from $439.7 million a year earlier. Net income attributable to Innospec increased to $30.8 million from $23.5 million. GAAP earnings per share were $1.25, compared with $0.94 in the prior-year quarter. Excluding special items, adjusted earnings per share were $1.27, compared with $1.26 a year earlier. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Adjusted EBITDA was $50.1 million, up from $49.1 million in the year-earlier period, while overall gross margin increased slightly to 28.1% from 28.0%. Performance Chemicals: Revenue increased 9% to $190.3 million. A 2% decline in volume was offset by an 8% favorable price mix and a 3% favorable currency impact. Operating income rose 15% to $16.4 million, though gross margin declined modestly to 17.3% from 17.5%. Fuel Specialties: Revenue rose 12% to $185.7 million, supported by 7% volume growth, a 3% improvement in price mix and a 2% currency benefit. Operating income increased 3% to $36.3 million. Gross margin declined to 36.6% from 38.1%, primarily due to weaker sales mix. Oilfield Services: Revenue climbed 14% to $115.4 million. Operating income increased 40% to $8.7 million, while gross margin improved to 32.3% from 29.6%, reflecting a more favorable sales mix. President and CEO Patrick Williams said Performance Chemicals benefited from operating leverage, while Fuel Specialties continued to produce results within its targeted margin range. He said Oilfield Services improved both sequentially and from a year earlier, aided by a recent expansion in drag-reducing agent, or DRA, capacity. → 3 Drone Stocks That Should Soar After the Summer Slump Management said the company remains focused on repairs and process improvements at its North Carolina facilities following earlier disruptions. Williams said the work was approximately 60% complete and that Innospec expects the facilities to be fully repaired and optimized by the end of the fourth quarter. The immediate priority has been meeting contractual customer volumes, according to Williams. The company said its Performance Chemicals business remained supply constrained during the second quarter and expects third-quarter results in the segment to be broadly similar to the second quarter. Additional capacity is expected to emerge in the latter part of the fourth quarter at the earliest, and more likely in the first quarter of 2027. → The Bitcoin Comeback May Already Be Underway—2 ETFs for Exposure Williams said the completed work should improve yields, safety and available capacity. He estimated that the project could increase capacity by more than 10% next year, though he said it was too early to place a precise figure on the volume benefit. Management also expects new products and formulation changes to support the segment’s margin profile once capacity becomes available. Chief Financial Officer Ian Cleminson said the company has managed raw-material inflation through pricing actions and, where possible, reformulating products for customers. He described market conditions as volatile, with prices moving rapidly, but said the company expects to continue passing through costs where needed. In Fuel Specialties, Cleminson said the year-over-year gross-margin decline was driven mostly by sales mix, with some contribution from pricing. Because the segment’s raw materials are largely crude-derivative based, the business experiences a lag between changing input costs and contractual pricing adjustments. Management expects some additional sequential gross-margin pressure in the third quarter as it works through that lag, but said it does not view the situation as concerning. Cleminson said Innospec expects Fuel Specialties’ third-quarter results to be similar to the second quarter and described the business as positioned for a strong second half. Oilfield Services benefited from strong uptake of newly expanded DRA capacity. Williams said most of the added capacity is nearly sold out, with new customers added in North America and shipments increasing to the Middle East, including for the East-West pipeline and other pipeline routes in that corridor. He said the company is discussing a potential additional DRA expansion. Williams said Innospec sees opportunities for new technologies in U.S. shale markets, South America and Mexico. Regarding Mexico, he said the company is seeing more conversations and customer outreach but is not counting on a material contribution this year or next year. He added that Innospec will remain cautious about payment terms in that market. Cash from operating activities was $7.2 million before capital expenditures of $16.5 million. Innospec repurchased just over 87,000 shares for $6.4 million during the quarter. As of June 30, the company held $250.2 million in cash and cash equivalents and had no debt. The company also paid its semiannual dividend of $0.92 per share. Williams said Innospec’s debt-free balance sheet provides flexibility for organic investment, acquisitions, dividend growth and share repurchases. For the second half of 2026, management expects further operating-income growth in Performance Chemicals and Oilfield Services, along with steady performance in Fuel Specialties. The company also expects working-capital initiatives to support higher operating cash flow during the second half. Innospec Incorporated (NASDAQ: IOSP) is a global specialty chemicals company headquartered in Cleveland, Ohio. The company operates through three principal business segments: Fuel Specialties, Oilfield Services, and Performance Chemicals. In the Fuel Specialties segment, Innospec develops and supplies additives designed to enhance octane levels, improve combustion efficiency, reduce emissions and prevent deposit formation in gasoline and diesel engines. Its Oilfield Services division provides chemical technologies—such as surfactants, corrosion inhibitors and demulsifiers—to support exploration, drilling, production optimization and enhanced oil recovery operations. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Innospec Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Innospec Inc (NASDAQ:IOSP) delivered a strong quarter with all businesses contributing to double-digit sales and operating income growth. Performance Chemicals operating income increased 15% year-over-year, driven by effective pricing and cost management. Oilfield Services operating income surged 40% year-over-year, supported by the recent DRA plant expansion and strong demand in the Middle East. The company maintains a robust balance sheet with over $250 million in cash and no debt, providing flexibility for investments, M&A, and shareholder returns. Fuel Specialties delivered another strong quarter with revenue up 12% and is on track for a potential record year, supported by strong technology and customer service. Performance Chemicals gross margins slightly decreased year-over-year, and the company remains supply-constrained due to ongoing plant repairs, limiting volume growth in the near term. Fuel Specialties gross margins declined 1.5 percentage points year-over-year due to a weaker sales mix and pricing lag, with expectations of further sequential margin pressure in Q3. The completions and production business within Oilfield Services is performing below expectations, with opportunities for growth and margin improvement still needed. The company expects Q3 performance chemicals results to be similar to Q2, with additional capacity benefits not expected until late Q4 or Q1 2027. Management noted that the company missed potential volume improvements in Q2 due to operating at full capacity, and the recovery of missed volumes is not expected until Q4 or Q1 of next year. Warning! GuruFocus has detected 4 Warning Sign with IOSP. Is IOSP fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide an update on the repair and upgrading process at your Performance Chemicals facilities, and when will it be complete? A: Patrick Williams (President and CEO): We are about 60% of the way through the process. We still have some minor repairs and pipe work for expansion, but we expect to be fully repaired and optimized by the end of Q4. The number one priority was to get the plant up and running to meet contractual volumes, which we have accomplished. As efficiencies come online, we expect better yield rates, improved safety, and a capacity increase of at least 10% moving into next year. Q: How is the pricing versus raw material environment in Performance Chemicals, and did the 8% price mix keep pace with cost inflation? A: Ian Clemenson (EVP and CFO): The team has done a great job keeping up with price increases and has been creative with new formulations to manage price actions. Year-over-year margins are comparable and improved sequentially over Q1. While markets are choppy with prices moving rapidly, we have a good handle on it and will continue to pass through costs where needed. Q: What are the growth drivers in the drag reducing agent (DRA) business, and how much is coming from the Middle East? A: Patrick Williams (President and CEO): We added capacity and the majority is almost sold out. We have added new customers in North America and shipped a lot to the Middle East for the East-West pipeline. We see this as not just a short-term fix, as they will likely move more products to that pipeline over time. Our product has been well received, and we are discussing another potential expansion of DRA capacity. Q: Can you quantify the impact of the repair and upgrade activity on Q2 results, and what should we expect for Q3 and Q4? A: Ian Clemenson (EVP and CFO): We were supply-constrained in Q2 and got as much volume out of North Carolina as possible. Q3 will be broadly similar to Q2 across Performance Chemicals. The additional capacity won't come online until Q4 at the earliest, more likely Q1 next year. We are operating towards the top end of our current capability, so Q3 will be similar, with Q4 potentially seeing a slight sequential uptick. Q: What is driving the improved price and mix in Performance Chemicals, and how sustainable is it as more capacity comes online? A: Ian Clemenson (EVP and CFO): We did a good job on pricing in Q2, with mix flat year-over-year. As we move into Q3, we will continue to manage pricing and potentially swap formulations with customers. The benefit of improvements won't be seen until late Q4 or early 2027 due to capacity constraints. New products coming online will also help the margin profile. We will manage raw materials responsibly through customers and supply chains. Q: What are the broader opportunities in the global oil market beyond DRAs in the Middle East, particularly in shale basins and Mexico? A: Patrick Williams (President and CEO): E&P companies remain disciplined with CapEx, but longer laterals and more stages are driving more volume per well. We are launching new technologies within the next six months to help in areas like South America and Mexico. In Mexico, we are seeing some activity start to turn, and we hope to have opportunities there over the next six months, though it will be a slow process. Q: Was the margin compression in Fuel Specialties due to raw material costs or sales mix, and is the segment on track for another record year? A: Ian Clemenson (EVP and CFO): The gross margin compression year-over-year was mostly from sales mix, with a little bit of pricing. The business is progressing nicely and is at the half-year point where we expected it to be. Q3 results should be very similar to Q2, and the business is well set for a strong second half, driven by great technology and service. They will drive hard for a record year. Q: How were you able to react so effectively to the Q1 disruptions and not miss a beat in terms of shipments and revenue growth? A: Patrick Williams (President and CEO): Credit goes to the management team and plant individuals who worked night and day, seven days a week, to fix the issues without claiming force majeure. The efficiencies coming through in Q4 will give us additional capacity without more CapEx. We were at capacity in Q2 and could have had more volume, but we will start seeing volume improvements in coming quarters. We are in a good position and confident moving forward. Q: Can you provide more detail on the potential return of business in Mexico and the timing of the ramp-up? A: Patrick Williams (President and CEO): There have been public announcements about capital spending in Mexico, and they realize they need to get more crude out of the system. It will be a slow process, and we are not going to sell products we won't get paid on for six months to a year. We have had some people come to us with opportunities, but we don't expect any effect this year or next. We are positioning ourselves to be a first choice when they return to using chemicals. Q: What is the expectation for Fuel Specialties gross margins in Q3 given the pricing lag? A: Ian Clemenson (EVP and CFO): We expect a little more pressure on gross margins in Q3 due to the lag between pricing and cost inflation. However, this is a well-trodden path, and the team is well versed in managing it. The market is responding correctly to our actions. If prices stabilize, we should see stability in margins as we move through Q3 and into Q4. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Innospec (IOSP) came out with quarterly earnings of $1.27 per share, beating the Zacks Consensus Estimate of $1.05 per share. This compares to earnings of $1.26 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +20.95%. A quarter ago, it was expected that this specialty chemicals company would post earnings of $1.02 per share when it actually produced earnings of $1.05, delivering a surprise of +2.94%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Innospec, which belongs to the Zacks Chemical - Diversified industry, posted revenues of $491.4 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 6.28%. This compares to year-ago revenues of $439.7 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Innospec shares have added about 11.7% since the beginning of the year versus the S&P 500's gain of 11%. While Innospec has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Innospec was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.26 on $478.3 million in revenues for the coming quarter and $4.84 on $1.9 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Chemical - Diversified is currently in the top 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Avient (AVNT), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This maker of resins used in plastic pipe and other products is expected to post quarterly earnings of $0.89 per share in its upcoming report, which represents a year-over-year change of +11.3%. The consensus EPS estimate for the quarter has been revised 0.3% lower over the last 30 days to the current level. Avient's revenues are expected to be $895.27 million, up 3.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Innospec Inc. (IOSP) : Free Stock Analysis Report Avient Corporation (AVNT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Strong contributions from all businesses with revenues up 12 percent and operating income up 16 percent Continued strength in Fuel Specialties and further improvement in Performance Chemicals and Oilfield Services Debt-free balance sheet with over $250 million in net cash; $6.4 million in share repurchases GAAP EPS $1.25 and adjusted non-GAAP EPS $1.27 ENGLEWOOD, Colo., Aug. 04, 2026 (GLOBE NEWSWIRE) -- Innospec Inc. (NASDAQ: IOSP) today announced its financial results for the second quarter ended June 30, 2026. Total revenues for the second quarter were $491.4 million, an increase of 12 percent from $439.7 million in the corresponding period last year. Net income attributable to Innospec for the quarter was $30.8 million or $1.25 per diluted share compared to $23.5 million or 94 cents per diluted share recorded in the second quarter last year. Adjusted EBITDA for the quarter was $50.1 million compared to $49.1 million reported in the same period a year ago. Results for this quarter include some special items, which are summarized in the table below. Excluding these items, adjusted non-GAAP EPS in the second quarter was $1.27 per diluted share, compared to $1.26 per diluted share a year ago. Cash from operating activities was $7.2 million before capital expenditure of $16.5 million. The quarter closed with net cash of $250.2 million. In the second quarter, the Company paid its semi-annual dividend of 92 cents per common share and repurchased 87,089 of its common shares under the share repurchase program at a cost of $22.7 million and $6.4 million respectively. Adjusted EBITDA and net income attributable to Innospec excluding special items and related per-share amounts together with net cash, are non-GAAP financial measures that are defined and reconciled with GAAP results herein and in the schedules below. Commenting on the second quarter results, Patrick S. Williams, President and Chief Executive Officer, said, “This was a strong quarter for Innospec with all businesses contributing to double digit operating income growth. Performance Chemicals operating leverage drove a 15 percent operating income increase over last year. In North Carolina we continue to advance our plant repairs, process improvements and upgrades to meet customer requirements. In parallel, we continue to execute on a range of other topline and margin opportunities identified in the business. We expect these combined efforts to drive further improvement in the second half of 2026. Fuel Specialties had another strong quarter delivering revenue and operating income growth with margins that remained within our target range. As expected, the business continued to deliver consistently as our team advances on a broad set of regional and end-market opportunities in traditional fuel, renewable fuel and non-fuel applications. Oilfield Services operating income and margins improved sequentially and on the prior year, driven by our recent DRA plant expansion and growing opportunities to deliver this industry-leading technology to our customers. In addition, we remain focused on driving growth and margin improvement in our US and Middle East completions and production business. We are confident that these combined efforts will drive further sequential improvement in the second half of 2026.” Revenues in Performance Chemicals of $190.3 million were up 9 percent from $173.8 million in the second quarter of last year. Volume reductions of 2 percent were offset by a positive price/mix of 8 percent and a positive currency impact of 3 percent. Gross margins of 17.3 percent decreased by 0.2 percentage points from the same quarter last year. Operating income of $16.4 million increased 15 percent from $14.3 million in the corresponding prior year period. Revenues in Fuel Specialties of $185.7 million were up 12 percent from $165.1 million in the second quarter of last year. Volumes were up 7 percent with price/mix up 3 percent and a positive currency impact of 2 percent. Gross margins of 36.6 percent decreased by 1.5 percentage points over last year. Operating income of $36.3 million increased 3 percent from $35.4 million a year ago. Revenues in Oilfield Services of $115.4 million for the quarter were up 14 percent from $100.8 million in the second quarter of last year. Gross margins of 32.3 percent increased by 2.7 percentage points from the same quarter last year. Operating income of $8.7 million increased 40 percent from $6.2 million in the prior year period. Corporate costs for the quarter were $21.6 million compared with $20.9 million a year ago. The effective tax rate for the quarter was 25.0 percent compared to 26.0 percent in the same period last year, reflecting the geographical location of taxable profits. For the quarter, cash provided by operating activities was $7.2 million compared to $10.5 million a year ago. As of June 30, 2026, Innospec had $250.2 million in cash and cash equivalents and no debt. Mr. Williams concluded, “This was a strong quarter for Innospec driven by improved performance in all our businesses. We remain focused on further technology development, topline growth and margin improvement opportunities, and we are optimistic about the impact that these actions will have on future results. Operating cash generation was positive in the quarter, and our net cash position closed at over $250 million. We expect increased operating cash flow in the second half as we improve working capital efficiency. We continue to have significant balance sheet flexibility for organic investment, M&A, dividend growth, and buybacks. This quarter we continued our record of returning value to shareholders with our semi-annual dividend of 92 cents per share and $6.4 million in share repurchases.” Use of Non-GAAP Financial Measures The information presented in this press release includes financial measures that are not calculated or presented in accordance with Generally Accepted Accounting Principles in the United States (GAAP). These non-GAAP financial measures comprise adjusted EBITDA, net income attributable to Innospec excluding special items and related per share amounts together with net cash. Adjusted EBITDA is net income attributable to Innospec per our consolidated financial statements adjusted for the exclusion of interest income, net, income taxes, depreciation and amortization, foreign currency exchange (gains)/losses, legacy costs of closed operations and adjustment to fair value of contingent consideration. Net income attributable to Innospec and diluted EPS, excluding special items, per our consolidated financial statements are adjusted for the exclusion of foreign currency exchange (gains)/losses, amortization of acquired intangible assets, legacy costs of closed operations and adjustment to fair value of contingent consideration. Net cash is cash and cash equivalents less total debt. Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures are provided herein and in the schedules below. The Company believes that such non-GAAP financial measures provide useful information to investors and may assist them in evaluating the Company’s underlying performance and identifying operating trends. In addition, these non-GAAP measures address questions the Company routinely receives from analysts and investors and the Company has determined that it is appropriate to make this data available to all investors. While the Company believes that such measures are useful in evaluating the Company’s performance, investors should not consider them to be a substitute for financial measures prepared in accordance with GAAP. In addition, these non-GAAP financial measures may differ from similarly titled non-GAAP financial measures used by other companies and do not provide a comparable view of the Company’s performance relative to other companies in similar industries. Management uses adjusted EPS (the most directly comparable GAAP financial measure for which is GAAP EPS) and net income attributable to Innospec excluding special items and adjusted EBITDA (the most directly comparable GAAP financial measure for which is GAAP net income attributable to Innospec) to allocate resources and evaluate the performance of the Company’s operations and has provided a reconciliation of adjusted EBITDA and net income attributable to Innospec excluding special items, and related per share amounts, to GAAP net income attributable to Innospec herein and in the schedules below. About Innospec Inc. Innospec Inc. is an international specialty chemicals company with approximately 2,450 employees in 22 countries. Innospec manufactures and supplies a wide range of specialty chemicals to markets in the Americas, Europe, the Middle East, Africa and Asia-Pacific. The Performance Chemicals business creates innovative technology-based solutions for our customers in the Personal Care, Home Care, Agrochemical, Mining and Industrial markets. The Fuel Specialties business specializes in manufacturing and supplying fuel additives that improve fuel efficiency, boost engine performance and reduce harmful emissions. Oilfield Services provides specialty chemicals to all elements of the oil and gas exploration and production industry. Forward-Looking Statements This press release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Such forward-looking statements include statements (covered by words like “expects,” “estimates,” “anticipates,” “may,” “could,” “believes,” “feels,” “plans,” “intends,” “outlook” or similar words or expressions, for example) which relate to earnings, growth potential, operating performance, events or developments that we expect or anticipate will or may occur in the future. Although forward-looking statements are believed by management to be reasonable when made, they are subject to certain risks, uncertainties and assumptions, and our actual performance or results may differ materially from these forward-looking statements. Additional information regarding risks, uncertainties and assumptions relating to Innospec and affecting our business operations and prospects are described in Innospec’s Annual Report on Form 10-K for the year ended December 31, 2025, Innospec’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 and other reports filed with the U.S. Securities and Exchange Commission. You are urged to review our discussion of risks and uncertainties that could cause actual results to differ from forward-looking statements under the heading "Risk Factors” in such reports. Innospec undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Contacts: Corbin BarnesInnospec [email protected]

The market expects Innospec (IOSP) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 4. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This specialty chemicals company is expected to post quarterly earnings of $1.06 per share in its upcoming report, which represents a year-over-year change of -15.9%. Revenues are expected to be $462.35 million, up 5.2% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 2.02% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction). The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Innospec, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -0.47%. On the other hand, the stock currently carries a Zacks Rank of #2. So, this combination makes it difficult to conclusively predict that Innospec will beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Innospec would post earnings of $1.02 per share when it actually produced earnings of $1.05, delivering a surprise of +2.94%. Over the last four quarters, the company has beaten consensus EPS estimates four times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Innospec doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Among the stocks in the Zacks Chemical - Diversified industry, Air Products and Chemicals (APD), is soon expected to post earnings of $3.36 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of +8.7%. This quarter's revenue is expected to be $3.18 billion, up 5.1% from the year-ago quarter. Over the last 30 days, the consensus EPS estimate for Air Products and Chemicals has been revised 0.5% down to the current level. Nevertheless, the company now has an Earnings ESP of -0.51%, reflecting a lower Most Accurate Estimate. This Earnings ESP, combined with its Zacks Rank #3 (Hold), makes it difficult to conclusively predict that Air Products and Chemicals will beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates three times. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Innospec Inc. (IOSP) : Free Stock Analysis Report Air Products and Chemicals, Inc. (APD) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research