Stepan (NYSE:SCL) Posts Quarterly Earnings Results, Beats Expectations By $0.57 EPS

Stepan (NYSE:SCL) released its earnings results on Wednesday. The basic materials company reported $1.18 earnings per share for the quarter, beating the consensus estimate of $0.61 by $0.57, FiscalAI reports. The business had revenue of $684.11 million during the quarter, compared to analysts’ expectations of $635.85 million. Stepan had a negative net margin of 0.61% and a positive return on equity of 2.65%. The firm’s revenue was up 15.0% on a year-over-year basis. During the same period last year, the business earned $0.52 earnings per share.

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 Performance

Stepan stock traded up $3.81 during mid-day trading on Wednesday, hitting $61.82. 185,327 shares of the company’s stock traded hands, compared to its average volume of 162,992. The firm has a 50 day simple moving average of $54.85 and a two-hundred day simple moving average of $53.62. Stepan has a fifty-two week low of $41.82 and a fifty-two week high of $68.00. The stock has a market cap of $1.40 billion, a price-to-earnings ratio of -99.89 and a beta of 0.95. The company has a debt-to-equity ratio of 0.28, a current ratio of 1.26 and a quick ratio of 0.86.

Hedge Funds Weigh In On Stepan

Several large investors have recently modified their holdings of the stock. EverSource Wealth Advisors LLC boosted its holdings in shares of Stepan by 206.5% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 521 shares of the basic materials company’s stock worth $28,000 after buying an additional 351 shares during the period. Inspire Investing LLC grew its stake in Stepan by 4.3% in the 4th quarter. Inspire Investing LLC now owns 9,923 shares of the basic materials company’s stock valued at $470,000 after buying an additional 405 shares during the last quarter. Daiwa Securities Group Inc. lifted its position in Stepan by 6.6% during the second quarter. Daiwa Securities Group Inc. now owns 8,936 shares of the basic materials company’s stock worth $488,000 after acquiring an additional 553 shares during the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. boosted its holdings in shares of Stepan by 4.6% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 12,701 shares of the basic materials company’s stock worth $699,000 after acquiring an additional 555 shares during the period. Finally, Swiss National Bank grew its position in shares of Stepan by 1.5% in the third quarter. Swiss National Bank now owns 41,500 shares of the basic materials company’s stock valued at $1,980,000 after purchasing an additional 600 shares during the last quarter. 82.70% of the stock is owned by institutional investors.

Analyst Ratings Changes

SCL has been the topic of several recent analyst reports. 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 cut Stepan from a “sell (d+)” rating to a “sell (d)” rating in a report on Monday, May 11th. One equities research analyst has rated the stock with a Hold rating and one has given a Sell rating to the stock. According to MarketBeat.com, the company has a consensus rating of “Reduce”.

About Stepan

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.