STEPAN CO SEC 10-Q Report

Stepan Co, a leading manufacturer of specialty and intermediate chemicals, has released its Form 10-Q report for the second quarter of 2025. The report highlights the company's robust financial performance and significant operational achievements, underscoring its strategic initiatives and market positioning in the chemical industry.

Financial Highlights

• Net Sales: $594.7 million, increased by 7% compared to the prior year quarter, driven by higher average selling prices and a slight increase in sales volume.
• Gross Profit: $71.9 million, reflecting a slight increase from the previous year, with a focus on maintaining margins despite higher raw material costs.
• Operating Income: $18.0 million, decreased by 4% year-over-year, impacted by increased operating expenses and a decrease in Surfactant and Specialty Products operating income.
• Net Income: $11.3 million, or $0.50 per diluted share, up from $9.5 million, or $0.42 per diluted share, in the second quarter of 2024, benefiting from a more favorable geographical mix of income and a favorable tax audit settlement.
• Diluted EPS: $0.50, reflecting an increase from $0.42 in the prior year quarter, supported by improved net income and operational efficiencies.

Business Highlights

• Revenue Segments: Surfactants accounted for 71% of consolidated net sales for the first six months of 2025, with significant contributions from consumer and industrial cleaning products. Polymers contributed 26% of net sales, driven by polyurethane polyols and specialty polyols used in construction and industrial applications. Specialty Products, including flavors and emulsifiers, made up 3% of net sales.
• Geographical Performance: North American surfactant sales increased by 6% due to higher demand in agricultural and oilfield markets. European surfactant sales rose by 18%, driven by higher selling prices and favorable currency translation. Latin American surfactant sales grew by 8%, despite a decrease in sales volume, due to favorable product mix and higher prices.
• Sales Units: Polymer sales volume increased by 7% in the second quarter of 2025, with notable growth in North America due to increased demand for polyols in rigid foam applications and phthalic anhydride. Surfactant sales volume decreased by 1%, impacted by lower demand in consumer products.
• New Production Launches: The company's new specialty alkoxylation facility in Pasadena, Texas, began operations in April 2025, contributing to increased production capacity and impacting interest expense due to the cessation of capitalized interest.
• Future Outlook: The company anticipates recovering higher oleochemical raw material costs in the second half of the year and expects continued demand growth in agricultural and oilfield markets. The impact of the 2025 U.S. tax act is being evaluated, with no material impact anticipated on financial results for 2025.

SEC Filing: STEPAN CO [ SCL ] - 10-Q - Aug. 06, 2025