<PAGE>

                                                          Page 1 of 59 pages

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549



                                    FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934


                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934

For Transition Period from                            to

For Quarter Ended September 30, 1998             Commission File Number 1-5112

                                ETHYL CORPORATION
             (Exact name of registrant as specified in its charter)

              VIRGINIA                                   54-0118820            
(State or other jurisdiction of                       (I.R.S. Employer 
 incorporation or organization)                      Identification No.)


330 SOUTH FOURTH STREET
P. O. BOX 2189
RICHMOND, VIRGINIA                                        23218-2189  
(Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including area code - (804) 788-5000

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports); and (2) has been subject to such filing
requirements for the past 90 days.

               Yes X                                      No ___


Number of shares of common stock, $1 par value, outstanding as of October 31,
1998: 83,465,460.

<PAGE>


                                ETHYL CORPORATION


                                    I N D E X


                                                                      Page
                                                                     Number

PART I.  FINANCIAL INFORMATION

  ITEM 1.  Financial Statements

     Consolidated Balance Sheets - September 30, 1998
               and December 31, 1997                                   3-4
               
     Consolidated Statements of Income - Three Months and 
               Nine Months Ended September 30, 1998 and 1997            5

     Condensed Consolidated Statements of Cash Flows -
               Nine Months Ended September 30, 1998 and 1997            6

     Notes to Financial Statements                                     7-10

  ITEM 2.  Management's Discussion and Analysis of Results
                    of Operations and Financial Condition             11-17


PART II.  OTHER INFORMATION

     ITEM 5.  Other Information                                         18

     ITEM 6.  Exhibits and Reports on Form 8-K                          18

SIGNATURE                                                               19

EXHIBIT INDEX                                                           20 

EXHIBIT 10    Antiknock Marketing and Sales Agreement between         
              Ethyl Corporation and The Associated Octel Company
              Limited                                                 21-59





                                        2



<PAGE>

    PART I.  FINANCIAL INFORMATION

    ITEM 1.  Financial Statements


                            ETHYL CORPORATION AND SUBSIDIARIES
                                CONSOLIDATED BALANCE SHEETS
                                  (Dollars in Thousands)


                                                      September 30
                                                          1998       December 31
                 ASSETS                               (unaudited)       1997
                                                      -----------   -----------

Current assets:
  Cash and cash equivalents                           $    11,265   $    18,162
  Accounts receivable, less allowance for doubtful
     accounts ($1,847 in 1998 and $2,349 in 1997)         168,419       165,259
  Inventories:
    Finished goods and work-in-process                    176,371       166,089
    Raw materials                                          22,406        20,001
    Stores, supplies and other                              8,913         7,746
                                                      -----------   -----------
                                                          207,690       193,836

  Deferred income taxes and prepaid expenses               21,235        21,857
                                                      -----------   -----------
        Total current assets                              408,609       399,114
                                                      -----------   -----------

Property, plant and equipment, at cost                    779,191       766,413
     Less  accumulated depreciation and amortization     (394,039)     (357,316)
                                                      -----------   -----------
        Net property, plant and equipment                 385,152       409,097
                                                      -----------   -----------

Other assets and deferred charges                         182,140       179,918
Goodwill and other intangibles - net of amortization      102,481        79,148
                                                      -----------   -----------
Total assets                                          $ 1,078,382   $ 1,067,277
                                                      ===========   ===========









See accompanying notes to financial statements.






















                                        3




<PAGE>


                           ETHYL CORPORATION AND SUBSIDIARIES
                               CONSOLIDATED BALANCE SHEETS
                                 (Dollars in Thousands)

                                                       September
                                                          1998       December 31
           LIABILITIES AND SHAREHOLDERS' EQUITY       (unaudited)       1997
                                                      -----------   ------------

Current liabilities:
  Accounts payable                                    $    69,288   $    66,573
  Accrued expenses                                         54,014        50,743
  Dividends payable                                         5,217         5,217
  Long-term debt, current portion                          35,741        46,707
  Income taxes payable                                     21,619        11,188
                                                      -----------   -----------
         Total current liabilities                        185,879       180,428
                                                      -----------   -----------

Long-term debt                                            555,637       594,429

Other noncurrent liabilities                               88,658        86,308

Deferred income taxes                                      65,755        61,514

Shareholders' equity
   Common stock ($1 par value)
     Issued - 83,465,460 in 1998 and 1997                  83,465        83,465
   Accumulated other comprehensive (loss) income           (5,447)        1,705
   Retained earnings                                      104,435        59,428
                                                      -----------   -----------
                                                          182,453       144,598
                                                      -----------   -----------
Total liabilities and shareholders' equity            $ 1,078,382   $ 1,067,277
                                                      ===========   ===========









See accompanying notes to financial statements.






















                                       4
<PAGE>
<TABLE>
                       ETHYL CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                     (In Thousands Except Per Share Amounts)
                                   (Unaudited)

<CAPTION>

                                                       Three Months Ended             Nine Months Ended
                                                          September 30                  September 30
                                                     ----------------------         ----------------------
                                                       1998          1997              1998        1997
                                                     ---------    ---------         ---------    ---------

<S>                                                  <C>          <C>               <C>          <C>
Net sales                                            $ 285,282    $ 254,074         $ 756,466    $ 789,123
Cost of goods sold                                     200,256      184,360           550,775      564,013
                                                     ---------    ---------         ---------    ---------

   Gross profit                                         85,026       69,714           205,691      225,110

Selling, general and administrative expenses            19,554       21,150            58,780       67,079
Research, development and testing expenses              16,718       15,883            49,256       48,675
Special items (income, net)                             (9,817)           -            (4,885)           -
                                                     ---------    ---------         ---------    ---------

   Operating profit                                     58,571       32,681           102,540      109,356

Interest and financing expenses                         10,072        4,926            30,754       15,489
Other income,  net                                        (430)        (590)          (22,750)        (947)
                                                     ---------    ---------         ---------    ---------

Income before income taxes                              48,929       28,345            94,536       94,814
Income taxes                                            18,131        9,499            33,879       33,441
                                                     ---------    ---------         ---------    ---------

Net income                                           $  30,798    $  18,846         $  60,657    $  61,373
                                                     =========    =========         =========    =========


Basic and diluted earnings per share                 $     .37    $     .16         $     .73    $     .52
                                                     =========    =========         =========    =========

Shares used to compute basic earnings per share         83,465      118,444            83,465      118,444
                                                     =========    =========         =========    =========

Cash dividends per share of common stock             $   .0625    $    .125         $   .1875    $    .375
                                                     =========    =========         =========    =========



See accompanying notes to financial statements.

</TABLE>


                                       5
<PAGE>
                       ETHYL CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars In Thousands)
                                   (Unaudited)

                                                             Nine Months Ended
                                                                September 30
                                                            -------------------
                                                               1998      1997
                                                            --------- ---------

Cash and cash equivalents at beginning of year              $  18,162 $  20,148
                                                            --------- ---------

Cash flows from operating activities:
    Net income                                                 60,657    61,373
    Adjustments to reconcile net income to cash flows from
      operating activities:
        Depreciation and amortization                          46,561    46,887
        Special charge                                          3,986         -
        Gain on sale of certain non-operating assets          (14,631)        -
        Working capital (increases) decreases                 (17,931)   16,372
        Other, net                                              2,385    (9,383)
                                                            --------- ---------
          Cash provided from operating activities              81,027   115,249
                                                            --------- ---------

Cash flows from investing activities:
    Capital expenditures                                      (19,429)  (28,446)
    Proceeds from sale of certain non-operating assets         25,562         -
    Other, net                                                   (407)      372
                                                            --------- ---------
          Cash provided from (used in) investing activities     5,726   (28,074)
                                                            --------- ---------

Cash flows from financing activities:
    Repayment of long-term debt                               (78,000)  (50,000)
    Cash dividends paid                                       (15,650)  (44,417)
                                                            --------- ---------
          Cash used in financing activities                   (93,650)  (94,417)
                                                            --------- ---------

Decrease in cash and cash equivalents                          (6,897)   (7,242)
                                                            --------- ---------


Cash and cash equivalents at end of period                  $  11,265 $  12,906
                                                            ========= =========


Supplemental investing and financing non-cash transactions
    Increase in intangibles related to the recognition of
      a portion of the contingent note payable to Texaco
      Inc. (Including deferred interest costs of $3,798)      (31,923)        -

    Recognition of portion of contingent note payable to
      Texaco, Inc.                                             28,125         -

See accompanying notes to financial statements.






                                        6
<PAGE>

                       ETHYL CORPORATION AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                     (In Thousands Except Per-Share Amounts)
                                   (Unaudited)



1.   In the opinion of management, the accompanying consolidated financial
     statements of Ethyl Corporation and Subsidiaries (the "Company") contain
     all adjustments necessary to present fairly, in all material respects, the
     Company's consolidated financial position as of September 30, 1998 and the
     consolidated results of operations for the three and nine-month periods
     ended September 30, 1998 and 1997 and the consolidated cash flows for the
     nine-month periods ended September 30, 1998 and 1997. All adjustments are
     of a normal, recurring nature. These financial statements should be read in
     conjunction with the consolidated financial statements and notes thereto
     included in the December 31, 1997 Annual Report. The December 31, 1997
     consolidated balance sheet data was derived from audited financial
     statements but does not include all disclosures required by generally
     accepted accounting principles. The results of operations for the
     nine-month period ended September 30, 1998 are not necessarily indicative
     of the results to be expected for the full year.

2.   On October 2, 1997, the Company purchased 34,999,995 shares of its common
     stock at $9.25 per share with the purchase price and related costs totaling
     about $328.9 million. The purchase was financed under the Company's $750
     million Competitive Advance, Revolving Credit Facility and Term Loan
     Agreement which increased the committed funds available for borrowing.

     As the Company's September 30, 1997 results of operations do not include
     any effects of the purchase of the 34,999,995 shares, the following
     selected unaudited pro forma information is being provided to present a
     summary of the results of operations of the Company as if the purchase of
     shares had occurred as of January 1, 1997. The pro forma information gives
     effect to adjustments for the reduction in outstanding shares, interest
     expense for additional debt and related income tax impact that would have
     been incurred to finance the purchase of the shares. The pro forma data is
     for informational purposes only and may not necessarily reflect the
     financial position or results of operations of the Company had the purchase
     of shares occurred on January 1, 1997.

                                  Three Months Ended        Nine Months Ended
                                  September 30, 1997        September 30, 1997 

     Net income                        $ 15,520                  $   51,431
     Basic and diluted earnings
       per share                           $.19                        $.62
     Shares used to compute
       earnings per share                83,444                      83,444





                                       7

<PAGE>





3.  Long-term debt consists of the following:      September 30,   December 31,
                                                       1998           1997
                                                       ----           ----
    Variable-rate bank loans (average effective
    interest rate was 6.3% for the nine-month
    period ended September 30, 1998 and 6.1% for
    the year 1997)                                   $524,000        $602,000
    5.99% Note payable to Texaco                       40,625          12,500
    8.6% to 8.86% Medium-term notes due through 2001   27,000          27,000
                                                      -------         -------
       Total long-term debt                           591,625         641,500
         Less unamortized discount                       (247)           (364)
                                                      -------         -------
       Net long-term debt                             591,378         641,136
         Less current portion                         (35,741)        (46,707)
                                                      -------         -------
       Long-term debt                                $555,637        $594,429  
                                                      =======         =======

         The Company has a contingent note payable to Texaco Inc. of up to $60
         million that is associated with Ethyl's 1996 acquisition of Texaco's
         worldwide lubricant additives business. The actual amount of the note
         is being determined using an agreed-upon formula based on volumes of
         certain acquired product lines shipped during calendar years 1996
         through 1998. Based on actual shipments through September 30, 1998,
         $40.6 million of the contingent note was included in long-term debt.
         Management has classified the note as long term pursuant to the
         Company's ability and intent to refinance the obligation on a long-term
         basis.

4. The components of comprehensive income for the three-month periods ended
   September 30, 1998 and 1997 follows:
                                                            Three Months Ended
                                                               September 30

                                                             1998        1997
                                                           --------    --------

   Net income                                                30,798    $ 18,846
                                                           --------    --------

   Other comprehensive income (loss), net of tax:
     Unrealized loss on marketable equity securities           (432)          -
       Foreign currency translation adjustments               3,115      (3,401)
                                                           --------    --------

   Other comprehensive income (loss), net of tax              2,683      (3,401)
                                                           --------    --------

   Comprehensive income                                    $ 33,481    $ 15,445
                                                           ========    ========

                                       8
<PAGE>




    The components of comprehensive income for the nine-month periods ended
    September 30, 1998 and 1997 follows:
                                                   Nine Months Ended 
                                                      September 30
                                             ------------------------------
                                                 1998               1997
                                                 ----               ----

   Net income                                        $60,657            $61,373
                                                     -------            -------
    Other comprehensive income, net of tax:
      Unrealized gain on marketable equity
       securities                          $ 1,289            $      -  
        Less: Reclassification adjustment
               for gain included in net
               income                       (9,487)   (8,198)        -        -
                                           -------             -------

      Foreign currency translation
       adjustments                                     1,046             (8,444)
                                                     -------            -------

    Other comprehensive (loss), net of tax            (7,152)            (8,444)
                                                     -------            -------

    Comprehensive income                             $53,505            $52,929
                                                     =======            =======

    The components of accumulated other
    comprehensive income consist of the
    following:                               September 30,      December 31,
                                                 1998               1997
                                             -------------      ------------

    Unrealized gain on marketable equity
     securities                                $ 1,626            $ 9,824
    Foreign currency translation adjustments    (7,073)            (8,119)
                                               -------            -------
      Accumulated other comprehensive (loss)
       income                                  $(5,447)           $ 1,705
                                               =======            =======



5.   The special items consist of a benefit due to a settlement with the
     Canadian government partially offset by a charge related to a 1998 enhanced
     retirement offer. The settlement of $13 million net of related expenses
     ($3.2 million) resulted in a benefit of $9.8 million in the third quarter,
     or $6.3 million after income taxes or $.07 per share and a $8.9 million
     benefit for the nine months net of related expenses ($4.1 million), or $5.7
     million after income taxes or $.07 per share. The settlement with the
     Canadian government was to reimburse the Company for a portion of its legal
     cost and lost profits following the repeal of the 1997 ban on the
     importation and interprovincial trade of methylcyclopentadienyl manganese
     tricarbonyl (MMT). The second quarter 1998 enhanced retirement offer
     resulted in a charge of about $4.0 million or $2.5 million after income
     taxes or $.03 per share. This charge covered a voluntary early retirement
     program and severance and termination benefits affecting 40 employees. The
     positions eliminated were administrative and support functions.
     Approximately $0.3 million has been paid out during the nine months for
     severance, vacation and termination benefits. The remainder will be paid
     out over an extended period for retirement and health insurance benefits.

6.   Other income, net for the nine-month period ended September 30, 1998
     included a gain on the sale of certain non-operating assets of $14.6
     million which occurred in the first and second quarters and a first quarter
     gain of $7.9 million relating to the settlement of a federal income tax
     audit.

7.   FASB Statement No. 131, "Disclosures about Segments of an Enterprise and
     Related Information" is effective for annual periods beginning after




                                       9
<PAGE>

     December 15, 1997 and for interim periods after the year of adoption. This
     statement establishes standards for reporting information about operating
     segments, including related disclosures about products and services,
     geographic areas, and major customers. The Company has not yet completed
     its analysis of what impact, if any, Statement No. 131 will have on
     operating segments reported, or on the financial statements and related
     disclosures.

     In June 1998, FASB Statement No. 133, "Accounting for Derivative
     Instruments and Hedging Activities," was issued. This statement establishes
     a comprehensive and consistent standard for the recognition and measurement
     of derivatives and hedging activities. Statement No. 133 requires all
     derivatives to be recorded on the balance sheet at fair value and the
     hedged item in earnings in the same period. This new standard is effective
     for all fiscal quarters of fiscal years beginning after June 15, 1999. The
     implementation of this new standard is not expected to have a material
     effect on the Company's consolidated results of operations or financial
     position.



























                                       10
<PAGE>

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION


The following is management's discussion and analysis of certain significant
factors affecting the Company's results of operations during the periods
included in the accompanying consolidated statements of income and changes in
the financial condition since December 31, 1997. The Company's results of
operations for the third quarter and nine months of 1998 include the effect of
the repurchase of approximately 35 million shares of its common stock on October
2, 1997.

Some of the information presented in the following discussion, including certain
disclosures made related to the Year 2000, constitutes forward-looking comments
within the meaning of the Private Securities Litigation Reform Act of 1995.
Although the Company believes its expectations are based on reasonable
assumptions within the bounds of knowledge of its business and operations, there
can be no assurance that actual results will not differ materially from its
expectations. Factors which could cause actual results to differ from
expectations include, without limitation, the timing of orders received from
customers, the gain or loss of significant customers, competition from other
manufacturers, a significant rise in interest rates, changes in the demand for
the Company's products, results of testing systems for Year 2000 compliance and
costs to remediate non-Year 2000 compliant systems, disruption of business
caused by the failure of vendors, suppliers, or customers to be Year 2000
compliant, non-Year 2000 compliant equipment, or the loss of electrical power
due to non-Year 2000 compliant energy providers. In addition, increases in the
cost of the product, changes in the market in general and significant changes in
new product introduction could result in actual results varying from
expectations.

Results of Operations
Third Quarter 1998 Compared to Third Quarter 1997

Net sales for the third quarter of 1998 amounted to $285.3 million, representing
an increase of $31.2 million (12.3%) from net sales of $254.1 million in the
third quarter of 1997. The $31.2 million increase was due to a $54.6 million
increase resulting from higher volumes shipped of both antiknocks and petroleum
additives. Most of the volume increase was reflected in antiknock shipments and
was primarily the result of expected fluctuations in order and shipping patterns
for lead, as well as an increase in MMT shipments following the lifting of the
MMT ban by the Canadian government. The favorable effect on net sales from the
increase in volumes was partly offset by a decrease in selling prices of $23.4
million. This reduction reflected lower selling prices in petroleum additives,
as well as antiknocks and an unfavorable foreign currency impact. The lower
selling prices were the result of competitive pricing pressures for both
petroleum additives and antiknock products, as well as weak Asia Pacific markets
for petroleum additives.

Cost of goods sold for the third quarter of 1998 increased $15.9 million (8.6%)
to $200.3 million in 1998 from $184.4 million in the third quarter of 1997. The
increase was a function of higher shipments, in both antiknocks and petroleum
additives, totaling $33.0 million, which was partially offset by lower costs of


                                       11
<PAGE>

$17.1 million. The lower costs in petroleum additives were the result of the
benefits of the Company's plant rationalization plan, a favorable foreign
currency impact, and overall lower raw material costs. The lower petroleum
additives costs were partially offset by an increase in antiknock material
costs.

Gross profit of $85.0 million in third quarter 1998 increased $15.3 million
(22.0%) from the third quarter 1997 level of $69.7 million. As a result of the
12.3% increase in net sales and the 8.6% increase in cost of sales, as outlined
above, the gross profit margin as a percentage of net sales improved from 27.4%
in 1997 to 29.8% in 1998. The higher profit and margins mainly reflected
increased shipments, particularly of antiknocks, which traditionally have higher
margins than petroleum additives.

Selling, general and administrative expenses combined with research, development
and testing expenses of $36.3 million in the third quarter 1998 were down $.8
million (2.1%) from the third quarter 1997. The reduction was primarily the
result of ongoing strict cost control efforts and a favorable foreign currency
impact. Selling, general and administrative expenses combined with research,
development and testing expenses as a percentage of net sales decreased from
14.6% in the third quarter 1997 to 12.7% in the third quarter 1998 reflecting an
increase in net sales of 12.3% combined with the 2.1% reduction in these
expenses.

The special item in the third quarter of $9.8 million ($6.3 million after-tax or
$.07 per share) represents a $13.0 million settlement, net of related expenses
($3.2 million), with the Canadian government. This settlement was for
reimbursement to the Company for a portion of its legal costs and lost profits
while the ban was in effect following the Government of Canada lifting its 1997
ban on the importation and interprovincial trade of methylcyclopentadienyl
manganese tricarbonyl (MMT).

Operating profit increased 79.2% to $58.6 million from $32.7 million in the
third quarter 1998. The higher operating profit primarily reflected higher
antiknock profit, as well as the settlement with the Canadian government, which
was partially offset by lower profit from petroleum additive products. The
increase in antiknocks resulted mostly from higher shipments. The lower
operating profit from petroleum additives reflected continuing pricing pressures
that were partially offset by higher shipments.

Interest and financing expenses of $10.1 million in 1998 were $5.1 million
higher than 1997. The increase was primarily the result of higher average debt
outstanding, which produced $4.9 million of the $5.1 million increase. The
higher average debt reflected the use of long-term debt to finance the October
1997 repurchase of almost 35 million shares of the Company's common stock.
Approximately $0.3 million of the increase was from higher fees, higher
amortization of deferred financing costs, and lower capitalized interest. These
increases were slightly offset by a decrease in average interest rates on
variable rate debt resulting in $0.1 million lower interest and financing
expenses.

Other income, net of $0.4 million in the third quarter of 1998 was comparable to
other income, net of $0.6 million in 1997.

Income taxes in the third quarter of 1998 increased $8.6 million (90.9%) to
$18.1 million from the third quarter 1997 amount of $9.5 million due to a 72.6%


                                       12
<PAGE>

increase in income before income taxes and a higher effective income tax rate.
The effective income tax rate of 37.1% in 1998 versus 33.5% in 1997 primarily
reflected the benefit in 1997 of settlement of certain tax issues with the
Internal Revenue Service.

As a result of the items outlined above, net income of $30.8 million in 1998 was
$12.0 million (63.4%) higher than the third quarter of 1997. Excluding the
benefit of the settlement with the Canadian Government, net income would have
been up 30.2%. Basic and diluted earnings per share of $.37 in 1998 increased
131% from $.16 in 1997 due to the increase in net income as well as the benefit
of the fourth quarter 1997 stock repurchase. The stock repurchase resulted in an
approximate reduction of 30% in the number of outstanding shares to 83,465,460
at September 30, 1998 compared to 118,443,835 at September 30, 1997.

Nine Months 1998 Compared to Nine Months 1997

Net sales for the nine months of 1998 amounted to $756.5 million which was down
$32.6 million (4.1%) from 1997 net sales of $789.1 million. The decrease in net
sales included a reduction of $67.1 million due to lower selling prices in both
petroleum additives and antiknocks. The lower average selling prices reflect the
highly competitive nature of today's petroleum additive and antiknock markets,
as well as an unfavorable foreign currency impact, and the slowdown in the Asia
Pacific petroleum additive markets. This was partially offset by an increase in
volumes shipped of both petroleum additives and antiknocks, which improved net
sales by $34.5 million.

Cost of goods sold of $550.8 decreased $13.2 million (2.3%) from nine months
1997 amount of $564.0 million. The decrease was the result of lower costs of
$36.9 million reflecting lower costs in petroleum additives due to the benefit
of the plant rationalization plan, a favorable foreign currency effect, and
overall lower raw material costs. The lower petroleum additives costs were
partially offset by an increase in antiknock costs, primarily due to higher
material costs, as well as higher volumes shipped of $23.7 million in both
petroleum additives and antiknocks.

Gross profit was $205.7 million for the nine months of 1998 compared to $225.1
million in 1997. This reduction of $19.4 million (8.6%) in gross profit resulted
in the gross profit margin as a percentage of sales decreasing to 27.2% in 1998
from 28.5% in 1997. The lower profit margins reflect the 4.1% reduction in net
sales and the 2.3% reduction in cost of sales, as outlined above.

Selling, general and administrative expenses combined with research, development
and testing expenses of $108.0 million in 1998 was $7.7 million (6.7%) lower
than 1997. This is the result of lower employee related costs reflecting the
ongoing strict cost controls, lower MMT related cost and a favorable foreign
currency impact. Selling, general and administrative expenses combined with
research, development and testing expenses as a percentage of net sales
decreased from 14.7% in 1997 to 14.3% in 1998 reflecting the impact of a 4.1%
reduction in net sales as compared to a 6.7% reduction in these expenses.

Special items for the nine months 1998 of $4.9 million included income of $8.9
million from the settlement with the Canadian government (see the third quarter


                                       13
<PAGE>

special item discussion), net of a special charge of about $4.0 million for an
enhanced retirement offer and the elimination of certain positions during the
second quarter. These initiatives affected 40 employees.

Operating profit decreased $6.8 million (6.2%) from $109.3 million in 1997 to
$102.5 million in 1998. The lower operating profit reflected both lower
antiknock profit (excluding the Canadian government settlement), as well as
lower profit from petroleum additives. The decrease in both antiknocks and
petroleum additives operating profit resulted from ongoing competitive pricing
pressures, partially offset by higher shipments. The cost of the enhanced
retirement offer and elimination of certain positions also reduced operating
profit in 1998.

Interest and financing expenses were $30.8 million for the nine months 1998,
which was $15.3 million higher than the 1997 amount of $15.5 million. Higher
average debt outstanding accounted for $14.3 million of the increase. The higher
average debt resulted from the use of long-term debt to finance the October 1997
repurchase of almost 35 million shares of the Company's common stock. Higher
average interest rates resulted in $0.2 million of the $15.3 million increase.
The remaining $0.8 million of the increase was caused by higher fees and
amortization of deferred financing costs, as well as lower capitalized interest.

Other income, net of $22.7 million in 1998 was $21.8 million higher than the
$0.9 million for the nine months 1997. The increase was primarily the result of
a $14.6 million gain on the sale of certain non-operating assets, as well as
interest income on the settlement of a federal income tax audit amounting to
$7.9 million.

Income taxes for the nine months 1998 increased $0.5 million (1.3%) to $33.9
million from the nine months 1997 amount of $33.4 million. The increase was
primarily due to a slightly higher effective income tax rate, offset by a small
reduction in income before income taxes of $0.3 million. The higher effective
income tax rate in 1998 of 35.8% as compared to 35.3% in 1997 was due primarily
to a settlement with the Internal Revenue Service in 1997, as well as a higher
state income tax rate largely offset by the tax benefit on the 1998 settlement
with the Internal Revenue Service.

As a result of the items discussed above, net income in 1998 decreased $0.7
million (1.2%) to $60.7 million from $61.4 million for the nine months 1997.
However, as a result of the 1997 stock repurchase, basic and diluted earnings
per share were $0.73 in 1998 as compared to $0.52 in 1997. At September 30,
1998, 83,465,460 shares were outstanding as compared to 118,443,835 at September
30, 1997.

Financial Condition and Liquidity

Cash and cash equivalents at September 30, 1998 totaled $11.3 million, a
decrease of $6.9 million since December 31, 1997. Cash flows were more than
sufficient to cover operating activities during the 1998 period. Cash flows from
operating activities for the nine months of 1998 of $81.0 million, combined with
cash-on-hand of $6.9 million and the proceeds from the sale of non-operating
assets of $25.6 million, were used to make principal payments on long-term debt
of $78.0 million, pay dividends of $15.7 million, and fund capital expenditures
of $19.4 million.

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<PAGE>

The combined current and noncurrent long-term debt amounted to $591.4 million at
September 30, 1998, as compared to $641.1 million at December 31, 1997. This net
decrease of $49.7 million represented a repayment of $78.0 million of debt
including $40.0 million on the Company's term loan, as well as a repayment of
$38.0 million under the Company's line of credit. The repayments of long-term
debt were partly offset by an $28.1 million increase in the note payable related
to the Texaco acquisition. The contingent note is payable to Texaco Inc. for up
to $60 million. The actual amount of the contingent note is being determined
using an agreed-upon formula based on volumes of certain acquired product lines
shipped during calendar years 1996 through 1998. Based on actual shipments
through September 30, 1998, $40.6 million of the contingent note was included in
long-term debt. The note is payable on February 26, 1999. Management has
classified the note as long term pursuant to the Company's ability and intent to
refinance the obligation on a long-term basis. The Company's long-term debt
(excluding the current portion) as a percentage of total capitalization was
75.3% at September 30, 1998 as compared to 80.4% at December 31, 1997. The
Company has historically targeted a range of 30% to 50% for its long-term debt
ratio, and intends to continue to use its cash flows to reduce long-term debt
outstanding.

The Company's capital spending during the year is expected to be lower than in
1997 reflecting the completion of several capital projects. Capital spending is
expected to be financed with cash from operations.

Working capital at September 30, 1998 was $222.7 million resulting in a current
ratio of 2.20 to 1. At December 31, 1997, the working capital was $218.7 and the
current ratio was 2.21 to 1. The slight increase in working capital primarily
resulted from an increase in inventories and a decrease in the current portion
of long-term debt. The slightly lower current ratio reflected a decrease in
cash, as well as increases in taxes payable, accounts payable and accrued
expenses. The Company anticipates that cash provided from operations will
continue to be sufficient to cover the Company's operating expenses, service
debt obligations, including reducing long-term debt, and make dividend payments
to shareholders.

Recent Developments

The Company announced that effective October 1, 1998, it had entered into an
agreement with The Associated Octel Company Limited (Octel) to market and sell
tetraethyl lead (TEL) antiknock compounds. The agreement finalizes the
memorandum of understanding signed by the companies in July 1998. This
arrangement includes all world areas except North America and the European
Union.

Ethyl and Octel believe that significant cost savings can be realized through
more efficient marketing, sales and distribution of TEL products in certain
areas of the world. All marketing and sales efforts made to customers will be in
the name of Octel. While Octel will continue to produce all products marketed
under this agreement, Ethyl will continue to provide bulk distribution services.
Other TEL services will be provided by one or both companies depending upon
cost, performance and flexibility.

                                       15
<PAGE>

Both companies believe that this agreement is the most effective way to continue
to provide their TEL customers with safe product supply and responsive
world-class service.

In the third quarter of 1998, the Company received a $13 million reimbursement
from the Canadian government for a portion of the Company's lost profits and
legal costs related to the Canadian government's decision to lift its 1997 ban
on the importation and interprovincial trade of Ethyl's MMT fuel additive.

Also, regarding current year operations, while overall operating profits are on
track to be higher in the second half of 1998 operating profits for the year are
expected to be moderately lower than 1997. This is primarily due to lower lead
antiknock profits, as well as lower petroleum additive profits primarily due to
pricing reflecting competitive pressures.

Year 2000

The Company is continuing to address the Year 2000 issues and has an aggressive
program in place to assure compliance of all of its mission critical systems
that can affect product supply, internal operations, employees, customers, and
suppliers. The Company's senior management and Board of Directors have placed a
high priority on the Year 2000 project. Funding necessary to successfully
complete the Year 2000 effort has been approved. In addition, a Year 2000
Project Manager has been assigned to coordinate the initiative and provide
regular status updates to senior management.

The Company expects that its products and services will be continuously
available and the facilities, equipment, and information systems of the business
will be fully functional and will operate accurately and without interruption
both before and after January 1, 2000. The Company is confident that its
commercial and operational systems will not expose it to any significant delay
or interruption. The Company will continue testing in the fourth quarter of 1998
and plans to use scheduled fourth quarter plant shut downs to implement and test
Year 2000 upgrades and replacements.

The Company's state of readiness was enhanced by conversion in prior years of
all mainframe systems to modern client/server systems. This included
implementation of SAP, Peoplesoft and other commercial and desktop software, all
of which are represented to be Year 2000 compliant. The Company has also
reviewed its manufacturing systems, R&D systems, testing equipment, desktop
computers, and technical infrastructure and has plans in place to have both
software and hardware fully compliant by December 31, 1998. In addition, the
Company has contracted an independent third party to provide assistance with the
review of manufacturing systems and embedded controllers.

The Company also includes in its Year 2000 program efforts to ensure the
readiness of mission critical suppliers of products and services, as well as key
customers. Confirmation of the readiness of these business partners Year 2000
status is being actively pursued.

Since most of the Company's Year 2000 compliance was achieved in prior years
through the systems implementations previously mentioned, the costs associated


                                       16
<PAGE>

with compliance in 1998 for the third quarter and nine months 1998 have been low
and total approximately $0.1 million and $0.2 million, respectively. The
expected remaining costs are estimated to be less than $2.6 million and will be
funded through cash provided from operations. Approximately $1.5 million of the
cost will be capitalized. The cost of this program that will not be capitalized
represents less than 6% of the Company's information resources operating budget.
Further, the emphasis that the Company has placed on the Year 2000 initiative
has not seriously delayed any of the Company's mission critical programs.

As part of the Year 2000 assessment, the Company has rated the impact of a Year
2000 problem for each of the systems in terms of risk to the business and the
probability of successfully resolving the issue. The Company believes that,
because of the extensive work which has already been completed and the plans in
place to obtain 100% compliance, sufficient time and resources are committed to
resolve any remaining Year 2000 issues. Consequently, the Company expects that
the internal risks are low and the overall risk of business interruption is
minimal.

Nevertheless, the Year 2000 program includes a review of both internal and
external risk factors, as well as the actions necessary to minimize any
potential impacts. By the end of the fourth quarter 1998, the Company will be
developing a formal contingency plan in the event that a critical system or
business partner is not or will not be compliant by January 1, 2000. The plan
will address worst case scenarios and could result in special staff training,
stockpiling critical raw materials, and scheduling production runs to minimize
losses in the event of power outages.

Finally, in order to further assure that the Company is proceeding on the proper
course to assess and remedy Year 2000 issues, an independent third party is
performing an independent status review of the Company's enterprise-wide Year
2000 program. The results of the review, which are expected soon, will be used
to enhance the Company's program. A follow-up review is planned during the first
half of 1999.

Recently Issued Accounting Standards

FASB Statement No. 131, "Disclosures about Segments of an Enterprise and Related
Information" is effective for annual periods beginning after December 15, 1997
and for interim periods after the year of adoption. This statement establishes
standards for reporting information about operating segments, including related
disclosures about products and services, geographic areas, and major customers.
The Company has not yet completed its analysis of what impact, if any, Statement
No. 131 will have on operating segments reported, or on the financial statements
and related disclosures.

In June 1998, FASB Statement No. 133, "Accounting for Derivative Instruments and
Hedging Activities", was issued. This statement establishes a comprehensive and
consistent standard for the recognition and measurement of derivatives and
hedging activities. Statement No. 133 requires all derivatives to be recorded on
the balance sheet at fair value and the hedged item in earnings in the same
period. This new standard is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999. The implementation of this new standard is not
expected to have a material effect on the Company's consolidated results of
operations or financial position.

                                       17
<PAGE>
                           PART II - Other Information


ITEM 5.  Other Information

         Refer to "Recent Developments" in Item 2 "Management's Discussion and
         Analysis of Results of Operations and Financial Condition" beginning
         on page 15.

ITEM 6.  Exhibits and Reports on Form 8-K

         Exhibit No.            Description

         10                     Antiknock Marketing and Sales Agreement, dated
                                October 1, 1998, between Ethyl Corporation and
                                The Associated Octel Company Limited*


























------------------
* Subject to a request for confidential treatment, certain provisions of the
Antiknock Marketing and Sales Agreement have been intentionally omitted.




                                       18
<PAGE>

                                    SIGNATURE

                Pursuant to the requirements of the Securities Exchange Act of

 1934, the registrant has duly caused this report to be signed on its behalf by

 the undersigned thereunto duly authorized.



                                                     ETHYL CORPORATION
                                                        (Registrant)



Date:  November 9, 1998                           By: /s/ J. Robert Mooney     
                                                  J. Robert Mooney
                                                  Senior Vice President and
                                                  Chief Financial Officer
                                                  (Principal Financial Officer)


Date:  November 9, 1998                           By:/s/ Wayne C. Drinkwater
                                                  Wayne C. Drinkwater
                                                  Controller
                                                  (Principal Accounting Officer)






















                                       19

<PAGE>

                                 EXHIBIT INDEX



                                                                 Page
                                                                Number

Number and Name of Exhibit

Exhibit 10             Antiknock Marketing and Sales Agreement
                       between Ethyl Corporation and The 
                       Associated Octel Company Limited         21-59

















Exhibit is not included except in 10-Q filed electronically.  Copy of Exhibit is
available upon request.


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