NYSE$SCL

Stepan Company · Q3 2022 earnings

Q3 2022 earnings · · Investor relations

Briefing

Stepan had strong performance and delivered record results, despite ongoing supply chain challenges.

Stepan Company reported a record net income of $39.4 million, or $1.71 per diluted share, for the third quarter of 2022, compared to $36.9 million, or $1.59 per diluted share, in the prior year. Adjusted net income was $46.3 million, or $2.01 per diluted share, versus $36.4 million, or $1.57 per diluted share, in the prior year. Total Company sales volume decreased 8% versus the prior year.

  • Surfactant operating income was $39.0 million versus $34.5 million in the prior year, driven by improved product and customer mix.
  • Polymer operating income was $31.9 million versus $19.8 million in the prior year, attributable to margin recovery and improved mix.
  • Specialty Product operating income was $9.7 million versus $2.4 million in the prior year, primarily attributable to improved margins and customer mix within the medium chain triglycerides (MCTs) product line.
  • The company increased its quarterly cash dividend in the fourth quarter of 2022 by $0.03 per share, or 9.0%, marking the 55th consecutive year of increased cash dividend.

Headline financials

Total Revenue

$719M

Previous: $603M+19.3%
EPS (adj)

$2.01

Previous: $1.57+28.0%
Global Sales Volume Change

-8.0%

No prior period
Capital Expenditures

-$205M

Previous: -$120M-71.8%
Free Cash Flow

-$166M

Previous: -$82.6M-100.9%
Net Income

$39.4M

Previous: $36.9M+6.7%
Operating Income

$54.7M

Previous: $40.2M+35.9%
Gross Profit

$118M

Previous: $91.9M+28.9%
Cash & Equivalents

$166M

Previous: $105M+57.4%
Total Assets

$2.34B

Previous: $1.96B+19.5%
Stock-Based Comp

$3.06M

Previous: $2.72M+12.3%

Revenue & EPS history

Stepan · Revenue · Quarterly

$719M

Q3 2022+19.3%vs Q3 2021
Beat estimate in 9 of 15 quarters(60%)
ActualEstimate

Revenue by segment

Stepan · $719M total across 3 segments · Q3 2022

  • Surfactants
    $475M+22.5%
  • Polymers
    $215M+8.0%
  • Specialty Products
    $29.5M+83.2%

Forward guidance

The Company delivered record third quarter and nine-month results and we expect to deliver record full year earnings again in 2022.

Tailwinds

  • Surfactants, Polymers and Specialty Products should all deliver full year earnings growth versus prior year.
  • Surfactant volumes within the Functional Products and Industrial Cleaning end markets are expected to show full year growth over 2021.
  • The long-term outlook for Rigid Polyols will remain attractive as energy conservation efforts and more stringent building codes are expected to continue.

Headwinds

  • The Company will be challenged by slowing global economic growth.
  • The Company will be challenged by weakening consumer and construction demand.
  • The Company will be challenged by continued inflationary pressures.
  • The Company will be challenged by a stronger U.S. dollar.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2022

Historical avgQ3 2022

-0.5%

Avg return

Earnings day

-1.1%

Avg return

5 days after

-0.7%

Avg return

30 days after

43%

28 / 65 earnings

Positive

+12.4%

Q1 2015

Best reaction

-20.4%

Q4 2025

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+1.1%-0.7%-2.7%
Q4 2025-20.4%-24.3%-25.2%
Q3 2025-0.4%-4.1%+2.2%
Q1 2025+7.1%+13.8%+15.2%
Q4 2024+0.1%-0.0%-7.3%
Q3 2024-0.8%-0.2%+5.4%
Q2 2024-11.0%-18.9%-13.8%
Q1 2024-0.6%+1.4%+0.2%
Q4 2023-2.5%-2.3%-3.2%
Q3 2023+7.9%+9.1%+18.7%
Q2 2023-3.8%-0.6%-10.1%
Q1 2023-10.2%-7.2%-5.8%
Q4 2022-2.4%-4.5%-13.3%
Q3 2022-2.9%-0.3%+10.5%
Q2 2022+8.6%+5.4%+2.0%
Q1 2022+4.9%+3.9%+11.7%
Q4 2021-3.5%-5.6%-9.7%
Q3 2021+2.4%+1.2%+1.9%
Q2 2021-0.1%+0.2%-1.0%
Q1 2021-0.7%-0.8%+2.1%
Q4 2020-2.9%-2.1%+4.7%
Q3 2020-0.5%+2.0%+7.0%
Q2 2020+7.5%+7.6%+12.8%
Q1 2020-1.9%-0.3%+4.8%
Q4 2019-1.6%-8.3%-26.6%
Q3 2019+0.1%+3.6%+1.4%
Q2 2019+3.7%+3.2%-2.0%
Q1 2019-0.2%-0.2%-6.2%
Q4 2018+1.5%+0.9%-7.7%
Q3 2018+3.0%+1.0%-2.1%
Q2 2018+5.3%+6.4%+8.8%
Q1 2018-17.2%-18.5%-20.0%
Q4 2017+5.8%+10.3%+11.3%
Q3 2017-7.0%-7.3%-4.3%
Q2 2017-7.2%-10.2%-15.9%
Q1 2017+9.7%+4.8%+7.4%
Q4 2016-10.3%-5.9%-0.7%
Q3 2016+6.6%+2.9%+11.9%
Q2 2016+4.2%+2.4%+11.6%
Q1 2016+6.6%
Q4 2015+12.0%
Q3 2015+8.8%
Q2 2015-10.6%
Q1 2015+12.4%
Q4 2014-0.6%
Q3 2014-5.2%
Q2 2014-1.5%
Q1 2014-1.7%
Q4 2013-5.1%
Q3 2013+0.6%
Q2 2013+0.7%
Q1 2013-11.4%
Q2 2010-0.5%
Q4 2012-0.1%
Q3 2012-3.8%
Q2 2012-8.0%
Q1 2011+3.6%
Q1 2012+3.9%
Q4 2009+4.7%
Q4 2011+4.7%
Q3 2011-4.5%
Q3 2010-4.5%
Q4 2010-2.0%
Q2 2011-2.0%
Q1 2010+1.7%

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