Stepan (NYSE:SCL – Get Free Report) released its quarterly earnings results on Wednesday. The basic materials company reported $1.18 EPS for the quarter, beating the consensus estimate of $0.61 by $0.57, FiscalAI reports. Stepan had a negative net margin of 0.61% and a positive return on equity of 2.65%. The business had revenue of $684.11 million during the quarter, compared to analyst estimates of $635.85 million. During the same period in the prior year, the firm posted $0.52 earnings per share. The company’s quarterly revenue was up 15.0% on a year-over-year basis.
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 Up 9.6%
Stepan stock traded up $5.57 during midday trading on Wednesday, reaching $63.58. The company’s stock had a trading volume of 239,250 shares, compared to its average volume of 163,228. The stock’s 50-day simple moving average is $54.85 and its 200-day simple moving average is $53.62. The company has a debt-to-equity ratio of 0.28, a current ratio of 1.26 and a quick ratio of 0.86. Stepan has a 52-week low of $41.82 and a 52-week high of $68.00. The stock has a market capitalization of $1.44 billion, a P/E ratio of -102.47 and a beta of 0.95.
Institutional Investors Weigh In On Stepan
Wall Street Analyst Weigh In
Several research analysts recently commented on the stock. Zacks Research upgraded shares of Stepan from a “strong sell” rating to a “hold” rating in a research note on Monday, July 6th. Weiss Ratings downgraded shares of Stepan from a “sell (d+)” rating to a “sell (d)” rating in a research note on Monday, May 11th. One analyst has rated the stock with a Hold rating and one has given a Sell rating to the company’s stock. Based on data from MarketBeat, Stepan presently has an average rating of “Reduce”.
Get Our Latest Stock Analysis on Stepan
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.
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