Loading...
•
Jun 30, 2024
Stepan Q2 2024 Earnings Report
Stepan's Q2 2024 earnings were impacted by operational expenses, start-up costs, and a criminal social engineering event, but adjusted EBITDA grew.
Key Takeaways
Stepan Company's second quarter earnings were negatively impacted by higher operational expenses at the Millsdale site, start-up costs for the Pasadena investment, and a criminal fraud event in Asia. Despite these challenges, the company saw volume growth in several core markets and delivered adjusted EBITDA growth of 4%.
Net income decreased by 25% compared to the prior year, totaling $9.5 million.
Pre-tax earnings were negatively impacted by $18.9 million due to issues at the Millsdale site, Pasadena investment costs, and a fraud event in Asia.
EBITDA increased by 3% year-over-year to $47.9 million, while adjusted EBITDA rose by 4% to $47.7 million.
Global sales volume increased by 4% year-over-year, with Surfactant and Polymer sales volume up by 5% and 2%, respectively.
Revenue by Segment
Forward Guidance
The company expects second half EBITDA to improve versus the prior year based on continued volume growth and a significant reduction in second half operational expenses at the Millsdale site. Free cash flow should continue to improve versus prior year driven by the completion of our Pasadena investment, the growth in market volumes, and our continued focus on cost reduction. We believe we are positioned to deliver full year Adjusted EBITDA growth and positive free cash flow.
Positive Outlook
- Continued volume growth expected.
- Significant reduction in second half operational expenses at Millsdale site anticipated.
- Ongoing recovery in Rigid Polyols expected.
- Expected second half recovery of the Agricultural Chemicals business.
- Completion of Pasadena investment will drive improved free cash flow.
Challenges Ahead
- Second quarter expenses significantly impacted earnings.
- Higher operational expenses at Millsdale site.
- Start up costs related to Pasadena investment.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
Loading earnings performance data...
Loading earnings reaction data...