Quaker Houghton Weekly News: Quaker Houghton Announces First-Quarter Results Better Than Expected

“Looking ahead, we expect the second quarter to be the most challenging quarter of the year. Many of our customers have already shut down their plants or significantly reduced production—particularly in the first half of Q2. We do anticipate a gradual and steady improvement in the second half of the year. However, providing any guidance under the current economic uncertainty caused by the global COVID-19 pandemic is extremely difficult; therefore, we are not issuing any guidance at this time.” said Michael F. Barry, Chairman, CEO, and President of Quaker Houghton (NYSE: KWR). First-quarter net sales totaled $378.6 million, up 79% compared to $211.2 million in the same period last year. This growth stemmed from the August 1, 2019 merger with Houghton International and the October 1, 2019 acquisition of Norman Hay’s operations. [lubesgo note: Norman Hay plc., founded in 1946 and headquartered in the UK, is a specialty chemicals company focused on surface treatment chemicals, impregnation sealants, and stamping plant operations.] Compared to pro forma net sales of $391 million in the first quarter of the prior year, first-quarter net sales declined approximately 3%. This figure includes adjustments related to Houghton and other items. Excluding contributions from Houghton and Norman Hay, Quaker’s net sales for the quarter would have declined by 11%—comprising a 5% volume decline, a 3% negative foreign exchange impact, and a 3% decline attributable to pricing and product mix. The primary driver behind the volume decline was the impact of the COVID-19 pandemic, especially in the Asia-Pacific region, including reduced sales resulting from Boeing’s decision to suspend production of the 737 MAX aircraft. Net income for the first quarter of fiscal 2020 increased by $58.1 million year-over-year, primarily due to the inclusion of Houghton and Norman Hay. The company’s first-quarter operating margin stood at 35.4%, down slightly from 35.9% in Q1 2019. This margin decline was mainly attributable to pricing and product mix effects stemming from the Houghton business. In Q3 2019, the company launched an organizational restructuring initiative as part of its Global Cost Integration Program. Related workforce reductions and facility closures are expected to continue through fiscal 2020 and 2021.

Adding Over $10 Billion to Google! Abel’s First Quarter U.S. Equity Moves as Berkshire Hathaway CEO: Exiting 16 Stocks, Re-entering Aviation Sector After Six Years…

In his shareholder letter, he wrote: “A large portion of our portfolio is concentrated in just a few U.S. companies—such as Apple, American Express, Coca-Cola, and Moody’s—businesses we understand well, whose management teams we highly regard, and which we expect will compound value over many decades to come. This concentrated approach will continue. We won’t make significant changes to these positions unless we see fundamental shifts in their long-term economic prospects.” He also noted that, together with Japan’s five major trading houses, these nine holdings collectively exceed $200 billion in market value—accounting for roughly two-thirds of Berkshire’s equity portfolio. According to the 13F filing for Q1, Berkshire held all four U.S. companies unchanged—no shares were bought or sold. At the May 2 annual meeting, 95-year-old Warren Buffett sat in the audience—not on stage—for the first time. He spoke emotionally about Berkshire’s investment in Apple: “We spent about $35 billion acquiring Apple shares. Effectively, we handed that money to Apple’s management team and asked them to make Berkshire proud—without us having to lift a finger. That’s our favorite way of doing business.” Ten years later, including dividends, realized gains, and unrealized appreciation, that initial $35 billion (pre-tax) had grown to $185 billion. Buffett stated, “Today, Apple remains our largest holding.” Apple has announced that Tim Cook will step down as CEO on September 1, succeeded by John Ternus, Head of Hardware Engineering; Cook will remain on Apple’s Board of Directors and continue participating in corporate affairs. Coca-Cola has also completed its CEO transition, with Henrique Braun succeeding James Quincey. At the shareholder meeting, Abel said he plans to meet separately with both incoming CEOs. “We understand the quality of these two companies,” Abel said. “Their boards are outstanding, and they’ve undoubtedly conducted thorough deliberations before selecting the right leaders. Time will tell. The fact is, we’re genuinely excited about the incoming leaders—and we fully support the accomplishments of the outgoing leaders, who have made these companies truly extraordinary.” V. Resuming Share Repurchases—Primarily on March 4 On the morning of March 5, Abel appeared on CNBC’s studio—the first televised appearance since assuming the CEO role. Becky Quick’s opening question concerned Berkshire’s start to 2026: its stock price had barely moved over the past year, its cash pile approached $400 billion, and markets eagerly awaited his next move. Abel confirmed that Berkshire resumed share repurchases on March 3—ending a nearly two-year hiatus. Simultaneously, Berkshire filed Forms 4 and 8-K with the SEC. He also disclosed a personal detail: he used his entire after-tax 2026 compensation—approximately $15.3 million—to purchase Berkshire shares. “First, it signals unequivocally that our interests are fully aligned with those of our shareholders, partners, and owners—that’s critically important,” Abel said. “Second, as CEO stepping into this role from Warren Buffett, I have complete confidence in Berkshire Hathaway. I’m taking over a company built on truly extraordinary foundations.” Berkshire’s share repurchase discipline—outlined in Abel’s first shareholder letter—states that repurchases will occur only when the stock trades below a conservative estimate of its intrinsic value.

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Quaker Houghton projects high single-digit adjusted EBITDA growth for 2026, expecting Q4 revenue and profitability to surpass prior year levels despite elevated raw material costs continuing through year-end.

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