The Lubrizol Corporation announced last week that it has updated its longer-term targets for earnings and margins, which it initially released on February 25, 2010. The company continues to project steady earnings growth during the next several years and established a new 2013 goal for earnings of $13.50 per share, an increase of approximately 80 percent compared with 2009 results as adjusted. The 2013 target assumes no restructuring and impairment charge adjustments.
At the company's analyst day, held last Tuesday in New York City, Lubrizol's senior vice president and chief financial officer, Charles Cooley, updated Lubrizol's longer-term growth targets for volume and earnings per share and provided new 2013 targets for consolidated and operating segment gross and operating margins. The 2013 earnings per share goal of $13.50 reflects earnings contributions from each of the company's operating segments as well as the earnings per share impact from the company's current share repurchase program.
Leading off the analyst day presentations was James Hambrick, chairman, president and chief executive officer. Hambrick noted, "In February, we announced an earnings per share goal of $10 by 2012. Given our favorable results to date, we expect to meet this goal ahead of schedule. And so, we believe it is appropriate to revisit our longer-term targets, especially to reinforce our positive outlook for sustained growth beyond 2010. We continue to perform well and benefit from a global market presence and highly valued technologies important to our customers' success. Additionally, our strong balance sheet and ample liquidity are important enablers for accelerating growth."
Also presenting at the analyst day event was Dan Sheets, president of Lubrizol Additives and Eric Schnur, president of Lubrizol Advanced Materials. Each discussed key elements of the growth plans for his respective business segments.
Dan Sheets spoke about "Winning With Customers", Lubrizol's overall diverse strategy which underpins the company's overall growth. Sheet's presented a series of slides and discussed the "limited number of technology suppliers". Sheet's stated "There are four global additives suppliers. Not everyone plays across the whole (lubricant) application area." He showed a slide comparing Lubrizol with its primary three competitors, Infineum, Oronite and NewMarket (Afton Chemical). in which Lubrizol was shown as the Market Leader in HDDO, PCMO, driveline gears and industrial additives. Oronite was shown as the Market Leader in marine engine oil additives, while Lubrizol was shown to have a Strong Position in marine engine oil additives and automotive ATF additives. Infineum was listed on this slide as having a Strong Position in HDDO, PCMO, marine engine oil additives and in ATF additives. Oronite, in addition to the above mentioned Market Leader in marine engine oil additives, has a Strong Position in HDDO and PCMO additives, while NewMarket was shown to have a Strong Position in PCMO, driveline gear and ATF, as well as industrial oil additives and a Weak Position in HDDO additives.
Lubrizol continued its share repurchase activity during the third quarter of 2010 by purchasing 2.1 million shares for $200.5 million at an average price of approximately $95 per share. Year-to-date 2010, the company has repurchased approximately 3.7 million shares for $326.0 million at an average price of approximately $89 per share.
Approximately 5.1 million shares remain under the existing share repurchase authorization. Through this program, Lubrizol expects to make purchases from time to time either in the open market or through private transactions. Although the repurchase program does not include a specific timetable or price targets and may be suspended or terminated at any time, the company expects the program will be completed within 18 months.