Stepan Co. (SCL) Reports In-Line Q2 EPS and Revenues

Stepan Co. (NYSE: SCL) reported Q2 EPS of $1.38, in-line with the analyst estimate of $1.38. Revenue for the quarter came in at $519.9 million versus the consensus estimate of $519.9 million.

Second Quarter Highlights

• Reported net income was a record $32.9 million, or $1.41 per diluted share versus $27.9 million, or $1.19 per diluted share, in the prior year. Adjusted net income* was a record $32.1 million, or $1.38 per diluted share versus $30.9 million, or $1.32 per diluted share, in the prior year.
• Consolidated net sales were $519.9 million, up 5% versus the prior year. This increase was primarily attributable to 5% global volume growth. The Company\'s first quarter acquisition of BASF\'s production facility in Mexico accounted for 2% and 3% of the quarterly increases in consolidated net sales and global volume growth, respectively.
• Surfactant operating income was $34.2 million versus $31.2 million in the prior year. The increase was primarily attributable to higher North American demand within the consumer and functional product end markets. Global Surfactant sales volume increased 7% versus the prior year.
• Polymer operating income was $19.5 million versus $21.3 million in the prior year. This decrease was mostly due to less favorable product mix and margin pressures. Global Polymer sales volume was up 1% versus the prior year.
• Specialty Product operating income was down $1.2 million versus the prior year. This decrease was primarily attributable to lower margins within the food and nutritional business and order timing differences within the flavor business.
• The Company's net-debt ratio declined slightly to 4%.

"The Company had a good first half, delivering record quarterly and year-to-date results. These results were driven by record first half Surfactant earnings and a lower 2018 effective tax rate," said F. Quinn Stepan, Jr., Chairman, President and Chief Executive Officer. "The Polymer business improved versus first quarter results despite margin and share challenges in our North American polyol business. European polyol volumes rebounded to prior year levels while both global specialty polyols and China delivered earnings growth. Our Specialty Product business results were down, partially due to changing order patterns, but we still anticipate full year income improvement from this segment."

For earnings history and earnings-related data on Stepan Co. (SCL) click here.

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