Stepan Company reports Q3 adjusted EPS 64c, consensus 75c

Reports Q3 revenue $562.23M, consensus $603.72M. “The Company’s third quarter results delivered gradual volume, adjusted EBITDA and adjusted net income growth versus the second quarter of 2023. The sequential volume growth was led by higher Rigid Polyols demand and new contracted volume for low 1,4 dioxane products in our Personal Care business. This was partially offset by continued customer and channel destocking within our agricultural business,” said Scott Behrens, President and Chief Executive Officer. “Specific to the third quarter, Surfactant unit margins were lower versus the prior year due to less favorable product mix, high-cost raw material inventory carryover, and pricing pressure in Latin America from imported products. Specialty Product unit margins were significantly lower due to high-cost inventory and pricing pressure related to increased MCT import activity. Expenses were slightly lower versus prior year due to proactive headcount and discretionary expense controls implemented earlier in the year and lower incentive-based compensation accruals. We recorded a $5.5 million pre-tax restructuring reserve to manage the transition of employees participating in our voluntary early retirement program. We continue to make significant progress on our cash objectives, delivering another $55 million reduction in our inventory levels. Finally, we completed our low 1,4 dioxane capital investments and we are executing the last phase of our Pasadena, TX alkoxylation investment which is expected to be operational mid-year 2024.”