Ashland, one of the few publicly traded companies to release results for its motor oil/fast lube divisions, recently announced its second quarter FY 2008 results (for the quarter ended March 31). Overall, the company reported net income of $72 million, compared with net income of $49 million from a year ago.
The company’s Valvoline division achieved record 2Q operating income of $24.1 million, compared with $22.4 million for the prior year. Sales and operating revenues were $401 million, representing a 5 percent increase of the prior year quarter. The company attributes the increased revenue to price increases. In all, Valvoline’s total lubricant sales volume increased 1 percent, essentially due to private-label business. Gross profit as a percent of sales did see a 1.2 percent decline versus the prior-year quarter, largely due to price increases in raw materials that had not yet been recouped by price increases since passed on to customers.
Valvoline also reported strong results from its Valvoline Instant Oil Change division, though the company declined to cite any specifics. “As the summer driving season commences, we are entering Valvoline’s traditionally stronger half, but we face some headwinds in the form of raw material cost increases relative to our announced price increases,” said James O’Brien, Ashland’s chairman and CEO. “Even so, we expect our Valvoline Instant Oil Change and Valvoline International segments to continue the positive trends of the first half, and we remain generally positive about the outlook for Valvoline.”