In This Article:
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Adjusted EBITDA: $53 million, up 11% year-over-year.
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Global Sales Volume: Down 1% overall.
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Adjusted Net Income: $23.7 million or $1.03 per diluted share, a 61% increase year-over-year.
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Free Cash Flow: $7 million for the first nine months of 2024.
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Dividends Paid: $8.4 million in the third quarter.
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Quarterly Cash Dividend: 38.5 per share, a 2.7% increase.
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Surfactant Net Sales: $383 million, a 2% increase year-over-year.
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Polymer Net Sales: $150 million, a 12% decrease year-over-year.
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Specialty Products Net Sales: $14.3 million, a 24% decrease year-over-year.
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Cash from Operations: $94 million for the first nine months, 11% lower than the previous year.
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Capital Investments: $87 million deployed in the first nine months.
Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Stepan Co (NYSE:SCL) reported a third quarter adjusted EBITDA of $53 million, marking an 11% increase compared to the previous year.
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The company achieved significant growth in its agricultural business, with a 22% increase in global agriculture volumes.
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Stepan Co (NYSE:SCL) is on track to meet its $50 million cost reduction goal for 2024, demonstrating effective cost management.
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The company declared a quarterly cash dividend increase of 2.7%, continuing its 57-year streak of dividend growth.
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Construction of the new alkoxylation production facility in Pasadena, Texas is 99% complete, expected to contribute fully by the second half of 2025.
Negative Points
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Global sales volume decreased by 1% due to demand weakness and competitive pressures in the polymer business.
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The polymer segment experienced a 12% decrease in net sales, primarily due to sluggish demand and competitive pressures.
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Free cash flow for the first nine months was only $7 million, impacted by increased inventory levels and planned plant turnarounds.
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The company faced a $3.3 million expense related to a fraud event in Asia, affecting corporate expenses.
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The specialty products segment saw a 24% decrease in net sales, driven by lower selling prices and a 5% decline in sales volume.
Q & A Highlights
Q: Can you provide insights into the recent performance of the agricultural business within the Surfactants segment? Are the improvements sustainable? A: Luis E. Rojo, CEO and President, stated that the agricultural business grew by 22% in the third quarter, marking the end of destocking. The growth aligns with expectations for the second half of 2024, and October's performance suggests continued positive trends. The fourth quarter is critical, and the company is optimistic about sustained improvement.