NYSE$SCL

Stepan Company · Q4 2020 earnings

Q4 2020 earnings · · Investor relations

Briefing

Stepan reported record fourth quarter and full year earnings, driven by strong surfactant volume growth and a polymer business boost from insurance recovery.

Stepan Company reported a strong fourth quarter with net income reaching $30.4 million, or $1.30 per diluted share, compared to $22.0 million, or $0.95 per diluted share, in the prior year. Adjusted net income was $33.1 million, or $1.42 per diluted share, versus $25.7 million, or $1.10 per diluted share, in the prior year. The company's performance was driven by increased demand for cleaning and disinfection products and an insurance recovery related to a plant power outage.

  • Net income increased to $30.4 million, or $1.30 per diluted share, compared to $22.0 million, or $0.95 per diluted share, in the prior year.
  • Adjusted net income reached $33.1 million, or $1.42 per diluted share, versus $25.7 million, or $1.10 per diluted share, in the prior year.
  • Surfactant operating income rose to $43.3 million, driven by an 8% increase in global sales volume.
  • Polymer operating income increased to $22.8 million, boosted by an insurance recovery and a 7% increase in global polymer sales volume.

Headline financials

Total Revenue

$495M

Previous: $445M+11.2%
EPS (adj)

$1.42

Previous: $0.90+57.8%
Capital Expenditures

$40.9M

Previous: $34.7M+17.7%
Free Cash Flow

$52.6M

Previous: $51M+3.2%
Net Income

$30.4M

Previous: $22M+37.7%
Operating Income

$44.5M

Previous: $28.5M+56.2%
Gross Profit

$109M

Previous: $84.7M+28.4%
Cash & Equivalents

$350M

Previous: $315M+11.0%
Total Assets

$1.75B

Previous: $1.58B+11.0%
Stock-Based Comp

$2.67M

Previous: $1.83M+45.9%

Revenue & EPS history

Stepan · Revenue · Quarterly

$495M

Q4 2020+11.2%vs Q4 2019
Beat estimate in 14 of 16 quarters(88%)
ActualEstimate

Revenue by segment

Stepan · $495M total across 3 segments · Q4 2020

  • Surfactants
    $358M+15.6%
  • Polymers
    $117M+0.2%
  • Specialty Products
    $19.6M+5.5%

Forward guidance

Stepan expects strong surfactant volumes in consumer product markets due to high demand for cleaning and disinfection products. They anticipate a slight improvement in surfactant demand in agricultural and oilfield markets and a modest recovery in global demand for rigid polyols. The acquisition of INVISTA's aromatic polyester polyol business is expected to support long-term demand growth, with slight improvements expected in the Specialty Product business.

Tailwinds

  • Surfactant volumes in consumer product end markets should remain strong.
  • Demand for surfactants within the agricultural and oilfield markets will improve slightly in 2021.
  • Global demand for rigid polyols has slowly recovered from pandemic-related delays.
  • INVISTA’s aromatic polyester polyol business acquisition positions Stepan to meet long term demand growth.
  • Specialty Product business results will improve slightly year-over-year.

Headwinds

  • No specific negatives were mentioned in the outlook summary.

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 Q4 2020

Historical avgQ4 2020

-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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