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Jun 30, 2021
Stepan Q2 2021 Earnings Report
Stepan's Q2 2021 results reflected record net income and adjusted net income, driven by strong polymer sales and improved specialty product performance, despite surfactant operating income decrease due to higher supply chain costs.
Key Takeaways
Stepan Company reported a record second quarter with net income of $43.3 million, or $1.85 per diluted share, compared to $35.7 million, or $1.54 per diluted share, in the prior year. Adjusted net income was $42.2 million, or $1.81 per diluted share, versus $38.3 million, or $1.65 per diluted share, in the prior year. Total Company sales volume increased 5% year-over-year, with significant growth in the Polymer segment offsetting a decrease in Surfactant sales volume.
Net income reached a record $43.3 million, or $1.85 per diluted share.
Adjusted net income was a second quarter record at $42.2 million, or $1.81 per diluted share.
Total Company sales volume increased 5% compared to the previous year.
Polymer operating income rose by 48%, driven by a 44% increase in global sales volume.
Revenue by Segment
Forward Guidance
The company anticipates challenges in North American consumer product end markets due to decreased consumer consumption compared to peak pandemic levels. Growth is expected in institutional cleaning and functional product markets, as well as in the agricultural and oilfield sectors due to higher commodity prices. The Polymer business is projected to grow due to recovery in rigid polyol demand and the INVISTA acquisition. Overall, the company remains cautiously optimistic despite rising raw material prices and planned maintenance expenses.
Positive Outlook
- Institutional cleaning volume will continue to grow versus prior year.
- Demand for surfactants within the agricultural and oilfield markets will benefit from higher agricultural and commodity prices and improve versus 2020.
- Global demand for rigid polyols continues to recover from pandemic-related delays.
- Acquisition of INVISTA’s aromatic polyester polyol business should position our Polymer business to deliver growth versus prior year.
- Long-term prospects for rigid polyols remain attractive as energy conservation efforts and more stringent building codes are expected to continue.
Challenges Ahead
- Surfactant volumes in the North American consumer product end markets will be challenged versus peak pandemic levels in 2020.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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