Stepan (NYSE:SCL) Releases Earnings Results, Beats Expectations By $0.57 EPS

Stepan (NYSE:SCL) issued its earnings results on Wednesday. The basic materials company reported $1.18 EPS for the quarter, topping the consensus estimate of $0.61 by $0.57, FiscalAI reports. Stepan had a positive return on equity of 3.90% and a negative net margin of 0.11%.The business had revenue of $684.11 million during the quarter, compared to analysts’ expectations of $635.85 million. During the same quarter last year, the firm posted $0.52 earnings per share. Stepan’s revenue was up 15.0% compared to the same quarter last year.

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

• Strong second-quarter performance: Adjusted EBITDA rose 45% to $74.4 million, while adjusted EPS more than doubled to $1.18, supported by 6% organic volume growth, margin recovery, and early Project Catalyst savings.
• Surfactants and Polymers both delivered higher earnings, with organic volumes up 7% and 5%, respectively. North American Polymers benefited from strong Rigid Polyols and Phthalic Anhydride demand, including spray-foam volumes that tripled from a small base.
• Project Catalyst remains on track: Management expects more than $60 million of pretax savings in 2026 and estimates quarterly savings could reach a $22 million run rate by year-end, while Pasadena has reached roughly 75%–80% of targeted production.
• Free cash flow was negative $15 million after a $58 million working-capital investment tied to higher raw-material costs and sales; management also cautioned that an estimated $5 million–$10 million of EBITDA benefited from customer pre-buying and that special maintenance turnarounds could reduce second-half EBITDA by $4 million–$5 million.
• The company plans to eliminate approximately 100 salaried positions in the third quarter and expects total 2026 restructuring charges of $75 million–$80 million, although management reiterated its expectation for full-year adjusted EBITDA growth, positive free cash flow, and continued deleveraging.

Stepan Stock Down 2.9%

SCL stock traded down $1.90 during mid-day trading on Friday, hitting $63.17. The stock had a trading volume of 11,685 shares, compared to its average volume of 164,781. Stepan has a 1-year low of $41.82 and a 1-year high of $68.00. The company has a fifty day moving average of $55.43 and a 200 day moving average of $53.82. The company has a current ratio of 1.15, a quick ratio of 0.86 and a debt-to-equity ratio of 0.20. The stock has a market capitalization of $1.43 billion, a price-to-earnings ratio of -526.46 and a beta of 0.95.

Stepan Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Tuesday, September 15th. Shareholders of record on Tuesday, September 1st will be paid a $0.395 dividend. The ex-dividend date is Tuesday, September 1st. This represents a $1.58 dividend on an annualized basis and a yield of 2.5%. Stepan’s payout ratio is -254.84%.

Hedge Funds Weigh In On Stepan

Several hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Geode Capital Management LLC increased its stake in shares of Stepan by 0.4% during the 4th quarter. Geode Capital Management LLC now owns 514,401 shares of the basic materials company’s stock worth $24,362,000 after purchasing an additional 2,060 shares during the last quarter. Charles Schwab Investment Management Inc. boosted its holdings in Stepan by 5.1% in the fourth quarter. Charles Schwab Investment Management Inc. now owns 477,456 shares of the basic materials company’s stock worth $22,612,000 after purchasing an additional 23,097 shares in the last quarter. Goldman Sachs Group Inc. increased its position in Stepan by 195.5% during the fourth quarter. Goldman Sachs Group Inc. now owns 299,970 shares of the basic materials company’s stock worth $14,207,000 after buying an additional 198,457 shares during the last quarter. Russell Investments Group Ltd. raised its holdings in Stepan by 36.7% during the fourth quarter. Russell Investments Group Ltd. now owns 285,918 shares of the basic materials company’s stock valued at $13,541,000 after buying an additional 76,711 shares in the last quarter. Finally, Invesco Ltd. lifted its position in shares of Stepan by 25.4% in the fourth quarter. Invesco Ltd. now owns 163,111 shares of the basic materials company’s stock worth $7,725,000 after buying an additional 33,048 shares during the last quarter. Institutional investors own 82.70% of the company’s stock.

Analysts Set New Price Targets

Several brokerages recently issued reports on SCL. Weiss Ratings raised Stepan from a “sell (d)” rating to a “sell (d+)” rating in a research note on Wednesday. Zacks Research raised Stepan from a “strong sell” rating to a “hold” rating in a research note on Monday, July 6th. One equities research analyst has rated the stock with a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Reduce”.

Stepan Company Profile

Stepan Company is a global manufacturer of specialty and intermediate chemicals, primarily known for its development and production of surfactants and related specialty products. The company’s portfolio includes a wide range of ingredients used to enhance the performance of consumer and industrial formulations, such as emulsifiers, foam control agents, odor control agents, antimicrobial products and performance additives. These products are integral components in cleaning solutions, personal care items, agrochemical formulations, coatings, oilfield treatments and polymer systems.

Serving a diverse set of end-markets, Stepan’s offerings address both consumer-facing and industrial applications.