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Sep 30, 2021
Stepan Q3 2021 Earnings Report
Stepan's third quarter results reflected an increase in net income and sales, but were impacted by supply chain disruptions.
Key Takeaways
Stepan Company reported an 11% increase in net income to $36.9 million, or $1.59 per diluted share, compared to $33.2 million, or $1.43 per diluted share, in the prior year. Total Company sales volume increased 1% versus the prior year. However, surfactant operating income decreased due to supply chain disruptions and lower sales volume, while polymer operating income was also down due to supply chain issues and non-recurring events from the previous year.
Net income increased to $36.9 million, or $1.59 per diluted share, up from $33.2 million, or $1.43 per diluted share, in the prior year.
Total Company sales volume increased 1% year-over-year.
Surfactant operating income decreased due to supply chain disruptions and lower sales volume.
Polymer operating income decreased due to supply chain disruptions and the non-recurrence of prior year events.
Revenue by Segment
Forward Guidance
The Company anticipates challenges in Surfactant volumes in the North American consumer product end markets due to raw material and transportation availability. The company believes that demand for surfactants within the agricultural and oilfield markets will exceed prior year demand. The Company expects Polymer business will deliver growth versus prior year due to the ongoing recovery from pandemic-related delays and cancellations of re-roofing and new construction projects and acquisition of INVISTA’s aromatic polyester polyol business. The company anticipates Specialty Product business results will improve slightly year-over-year. Despite supply chain disruptions continuing to impact the Company, the company remains optimistic about delivering full year earnings growth.
Positive Outlook
- Industrial and institutional cleaning volume will grow versus prior year
- Demand for surfactants within the agricultural and oilfield markets will exceed prior year demand.
- Polymer business will deliver growth versus prior year due to the ongoing recovery from pandemic-related delays
- Polymer business will deliver growth versus prior year due to cancellations of re-roofing and new construction projects
- Polymer business will deliver growth versus prior year due to first quarter 2021 acquisition of INVISTA’s aromatic polyester polyol business
Challenges Ahead
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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