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Sep 30, 2022
Stepan Q3 2022 Earnings Report
Stepan had strong performance and delivered record results, despite ongoing supply chain challenges.
Key Takeaways
Stepan Company reported a record net income of $39.4 million, or $1.71 per diluted share, for the third quarter of 2022, compared to $36.9 million, or $1.59 per diluted share, in the prior year. Adjusted net income was $46.3 million, or $2.01 per diluted share, versus $36.4 million, or $1.57 per diluted share, in the prior year. Total Company sales volume decreased 8% versus the prior year.
Surfactant operating income was $39.0 million versus $34.5 million in the prior year, driven by improved product and customer mix.
Polymer operating income was $31.9 million versus $19.8 million in the prior year, attributable to margin recovery and improved mix.
Specialty Product operating income was $9.7 million versus $2.4 million in the prior year, primarily attributable to improved margins and customer mix within the medium chain triglycerides (MCTs) product line.
The company increased its quarterly cash dividend in the fourth quarter of 2022 by $0.03 per share, or 9.0%, marking the 55th consecutive year of increased cash dividend.
Revenue by Segment
Forward Guidance
The Company delivered record third quarter and nine-month results and we expect to deliver record full year earnings again in 2022.
Positive Outlook
- Surfactants, Polymers and Specialty Products should all deliver full year earnings growth versus prior year.
- Surfactant volumes within the Functional Products and Industrial Cleaning end markets are expected to show full year growth over 2021.
- The long-term outlook for Rigid Polyols will remain attractive as energy conservation efforts and more stringent building codes are expected to continue.
Challenges Ahead
- The Company will be challenged by slowing global economic growth.
- The Company will be challenged by weakening consumer and construction demand.
- The Company will be challenged by continued inflationary pressures.
- The Company will be challenged by a stronger U.S. dollar.
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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