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Innospec (IOSP) Down 21.8% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Innospec (IOSP - Free Report) . Shares have lost about 21.8% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Innospec due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Innospec Inc. before we dive into how investors and analysts have reacted as of late.
Key Highlights
Earnings per share (as reported) for the fourth quarter of 2025 improved to $1.91 from a loss of $2.80 a year ago, which was impacted by a UK pension scheme buyout.
Adjusted earnings per share rose 6% to $1.50 from $1.41 a year ago, beating the consensus mark of $1.26.
Revenues for the fourth quarter declined 2% year over year to $455.6 million, missing the Zacks Consensus Estimate of $477 million.
Adjusted EBITDA declined 2% year over year to $55.7 million. Operating income increased 14% to $46.8 million.
Segment Performance
Fuel Specialties revenues rose 1% year over year to $194.1 million, driven by volume growth of 8% offset by an adverse price/mix of 10% and a positive currency impact of 3%. Gross margin expanded 0.3 percentage points to 34.7% and operating income increased 7% to $37.2 million.
Performance Chemicals revenues were flat at $168.4 million as volume declines of 7% were offset by positive price/mix of 3% and currency of 4%. Gross margin compressed 4.6 percentage points to 18.1%, and operating income fell 14% to $17.7 million.
Oilfield Services revenues declined 12% to $93.1 million, reflecting lower U.S. completions and reduced Middle East activity. Gross margin improved 1.8 percentage points to 31.9% on richer sales mix and lower overheads and operating income increased 9% to $8.2 million.
Financials and Outlook
Operating cash flow reached $61.4 million with free cash flow of $40.9 million versus $5.1 million in the year-ago quarter. The company ended 2025 with net cash of $292.5 million and no debt.
In the fourth quarter, the adjusted effective tax rate was 24.1%. The company expects a 2026 effective tax rate of roughly 26% and corporate costs of around $20 million per quarter.
Performance Chemicals’ growth is expected to be roughly flat for 2026, with margin improvement building into the second half through pricing mechanisms, manufacturing efficiencies and higher-margin new products.
For Oilfield Services, the company targets 2026 operating income growth with roughly 5-7% full-year revenue growth, led by Middle East activity and the DRA ramp. Fuel Specialties is expected to remain a stable contributor with long-term growth of 2-3%. A historic late-January 2026 winter storm is expected to impact near-term results, with Performance Chemicals' first-quarter operating income around $10-$11 million and Oilfield Services' operating income of around $5-$6 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -23.33% due to these changes.
VGM Scores
At this time, Innospec has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a score of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Innospec has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Innospec (IOSP) Down 21.8% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Innospec (IOSP - Free Report) . Shares have lost about 21.8% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Innospec due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Innospec Inc. before we dive into how investors and analysts have reacted as of late.
Key Highlights
Earnings per share (as reported) for the fourth quarter of 2025 improved to $1.91 from a loss of $2.80 a year ago, which was impacted by a UK pension scheme buyout.
Adjusted earnings per share rose 6% to $1.50 from $1.41 a year ago, beating the consensus mark of $1.26.
Revenues for the fourth quarter declined 2% year over year to $455.6 million, missing the Zacks Consensus Estimate of $477 million.
Adjusted EBITDA declined 2% year over year to $55.7 million. Operating income increased 14% to $46.8 million.
Segment Performance
Fuel Specialties revenues rose 1% year over year to $194.1 million, driven by volume growth of 8% offset by an adverse price/mix of 10% and a positive currency impact of 3%. Gross margin expanded 0.3 percentage points to 34.7% and operating income increased 7% to $37.2 million.
Performance Chemicals revenues were flat at $168.4 million as volume declines of 7% were offset by positive price/mix of 3% and currency of 4%. Gross margin compressed 4.6 percentage points to 18.1%, and operating income fell 14% to $17.7 million.
Oilfield Services revenues declined 12% to $93.1 million, reflecting lower U.S. completions and reduced Middle East activity. Gross margin improved 1.8 percentage points to 31.9% on richer sales mix and lower overheads and operating income increased 9% to $8.2 million.
Financials and Outlook
Operating cash flow reached $61.4 million with free cash flow of $40.9 million versus $5.1 million in the year-ago quarter. The company ended 2025 with net cash of $292.5 million and no debt.
In the fourth quarter, the adjusted effective tax rate was 24.1%. The company expects a 2026 effective tax rate of roughly 26% and corporate costs of around $20 million per quarter.
Performance Chemicals’ growth is expected to be roughly flat for 2026, with margin improvement building into the second half through pricing mechanisms, manufacturing efficiencies and higher-margin new products.
For Oilfield Services, the company targets 2026 operating income growth with roughly 5-7% full-year revenue growth, led by Middle East activity and the DRA ramp. Fuel Specialties is expected to remain a stable contributor with long-term growth of 2-3%. A historic late-January 2026 winter storm is expected to impact near-term results, with Performance Chemicals' first-quarter operating income around $10-$11 million and Oilfield Services' operating income of around $5-$6 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -23.33% due to these changes.
VGM Scores
At this time, Innospec has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a score of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Innospec has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.