NYSE$SCL
Stepan Company · Q3 2023 earnings
Q3 2023 earnings · · Investor relations
Briefing
Stepan's third quarter results reflected gradual volume, adjusted EBITDA and adjusted net income growth compared to the second quarter of 2023, but were down year-over-year.
Stepan Company reported a decrease in net income for Q3 2023, with $12.6 million compared to $39.4 million in the prior year. The decline was influenced by lower sales volume and unit margins in the Surfactant and Specialty Product segments. However, there was sequential growth versus the second quarter of 2023, led by higher Rigid Polyols demand and new contracted volume for low 1,4 dioxane products.
- Reported net income was $12.6 million, or $0.55 per diluted share, versus $39.4 million, or $1.71 per diluted share, in the prior year.
- Surfactant operating income was $15.4 million versus $39.0 million in the prior year, driven by a 7% decline in global sales volume and lower unit margins.
- Polymer operating income was $21.8 million versus $31.9 million in the prior year, primarily due to a 12% decline in global sales volume.
- Specialty Product operating income was $2.4 million versus $9.7 million in the prior year, attributable to lower unit margins and sales volume within the medium chain triglycerides (MCT) product line.
Headline financials
Revenue & EPS history
Stepan · Revenue · Quarterly
$562M
Revenue by segment
Stepan · $562M total across 3 segments · Q3 2023
- Surfactants$374M-21.3%66.5%
- Polymers$170M-21.1%30.2%
- Specialty Products$18.8M-36.2%3.3%
Forward guidance
The company anticipates challenges in Q4 2023, similar to the first nine months, including destocking in the agricultural end market and low seasonal demand for Rigid Polyols. They expect to reduce inventory further by year-end and approach the end of their high capital spending phase. Looking to 2024, they anticipate improved volumes and margins due to recovery in Rigid Polyols demand, Surfactant volume growth from new contracts, and lower raw material costs. The company is expanding cost reduction activities and expects to deliver $50 million in pre-tax savings in 2024.
Tailwinds
- Volumes and margins will improve due to continued recovery in Rigid Polyols demand.
- Growth in Surfactant volume driven by new contracted business.
- Lower raw material costs are expected.
- Cost reduction activities are expected to deliver $50 million in pre-tax savings in 2024.
- Strategic initiatives and cost reductions should position the company to deliver earnings growth and positive free cash flow in 2024.
Headwinds
- The fourth quarter of 2023 will face challenges similar to those experienced during the first nine months.
- Continued destocking within the agricultural end market is expected.
- Normal low seasonal demand for Rigid Polyols is anticipated.
- Future inflation.
- Increased expenses associated with the planned commissioning of our new Pasadena alkoxylation assets.
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 2023
-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
| Quarter | Report date | Reaction (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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