Stepan (NYSE:SCL) Announces Earnings Results, Beats Expectations By $0.21 EPS

Stepan (NYSE:SCL) issued its quarterly earnings results on Wednesday. The basic materials company reported $0.94 earnings per share for the quarter, topping analysts’ consensus estimates of $0.73 by $0.21, FiscalAI reports. The company had revenue of $692.15 million for the quarter, compared to analyst estimates of $634.30 million. Stepan had a return on equity of 4.81% and a net margin of 0.17%. The business’s revenue for the quarter was up 17.3% compared to the same quarter last year. During the same quarter in the prior year, the company posted $0.48 EPS.

Here are the key takeaways from Stepan’s conference call:

• Third-quarter adjusted EBITDA rose 18% to $66.3 million, while adjusted EPS nearly doubled to $0.94, supported by 7% organic volume growth, margin recovery, and productivity savings across all three segments.
• Surfactants led performance with adjusted EBITDA up 27%, while Specialty Products benefited from 20% volume growth in MCT products and North American Polymers delivered double-digit volume growth.
• Project Catalyst savings are running ahead of plan, with a $23 million quarterly run rate and expectations to exceed the 2026 savings target; management also expects to surpass $25 million in average quarterly savings during 2027.
• Stepan improved net leverage to 2.4 times and expects continued deleveraging, aided by $28.5 million of land-sale proceeds earmarked for debt repayment; management also raised the quarterly dividend for the 59th consecutive year.
• Free cash flow was only $8 million despite stronger earnings because working capital absorbed $32 million, while Europe and China remained weak in Polymers, crop productivity demand softened, and ongoing raw-material volatility and maintenance costs remain headwinds.

Stepan Price Performance

Shares of SCL traded down $0.49 during midday trading on Friday, reaching $69.50. The stock had a trading volume of 232,995 shares, compared to its average volume of 164,716. The company’s 50-day moving average is $63.00 and its 200 day moving average is $56.88. The company has a market capitalization of $1.58 billion, a price-to-earnings ratio of 365.79 and a beta of 0.91. Stepan has a 12-month low of $41.82 and a 12-month high of $70.81. The company has a current ratio of 1.32, a quick ratio of 0.77 and a debt-to-equity ratio of 0.28.

Stepan Increases Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Tuesday, December 15th. Stockholders of record on Tuesday, December 1st will be issued a dividend of $0.4050 per share. This is an increase from Stepan’s previous quarterly dividend of $0.3950. This represents a $1.62 dividend on an annualized basis and a dividend yield of 2.3%. The ex-dividend date is Tuesday, December 1st. Stepan’s dividend payout ratio is 831.58%.

Analysts Set New Price Targets

SCL has been the topic of several recent analyst reports. Seaport Research Partners reaffirmed a “buy” rating and issued a $85.00 price target on shares of Stepan in a report on Friday, August 7th. Weiss Ratings restated a “sell (d+)” rating on shares of Stepan in a research note on Tuesday, October 27th. Zacks Research cut shares of Stepan from a “strong-buy” rating to a “hold” rating in a report on Wednesday. Finally, Wall Street Zen raised Stepan from a “hold” rating to a “buy” rating in a research note on Saturday, August 8th. One analyst has rated the stock with a Hold rating and one has assigned a Sell rating to the company’s stock. Based on data from MarketBeat.com, Stepan has an average rating of “Reduce”.

About Stepan

Stepan Company (NYSE:SCL) is a global manufacturer of specialty and intermediate chemicals. Founded in 1932 and headquartered in Northfield, Illinois, the company develops products used by manufacturers in consumer and industrial markets.

Stepan’s principal products include surfactants, which are used in detergents, cleaners, personal-care products, agricultural formulations and other applications. The company also produces polyurethane polyols, phthalic anhydride and other specialty chemicals used in insulation, construction materials, coatings, plastics, food packaging and related industrial products.

Stepan serves customers across North America, Latin America, Europe and Asia through a network of manufacturing facilities, research and development operations, and sales organizations.