Group 1 - Stepan Co. reported quarterly earnings of $0.12 per share, missing the Zacks Consensus Estimate of $0.35 per share, representing a -65.71% earnings surprise compared to $0.33 per share a year ago [1] - The company posted revenues of $525.61 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 2.55%, but down from $532.13 million year-over-year [2] - Stepan Co. shares have lost about 4.6% since the beginning of the year, while the S&P 500 has gained 4% [3] Group 2 - The earnings outlook for Stepan Co. is uncertain, with current consensus EPS estimates at $0.92 for the coming quarter and $3.55 for the current fiscal year, with revenues expected to be $571.1 million and $2.29 billion respectively [7] - The Zacks Industry Rank for Chemical - Diversified is currently in the bottom 10% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8] - The estimate revisions trend for Stepan Co. is unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, suggesting expected underperformance in the near future [6]

Financial Performance - Reported net income for Q4 2024 was $3.4 million, compared to a net loss of $1.2 million in the prior year, while adjusted net income decreased by 63% to $2.8 million[4]. - Adjusted EBITDA for Q4 2024 was $35.0 million, down 7% year-over-year, while EBITDA increased by 39% to $35.8 million[4][10]. - Net sales for Q4 2024 were $525.6 million, a decrease of 1.0% from $532.1 million in Q4 2023[26]. - Gross profit for Q4 2024 was $56.7 million, down 14.6% from $66.4 million in Q4 2023[26]. - Operating income for Q4 2024 increased to $7.7 million compared to $0.2 million in Q4 2023[26]. - Basic net income per share for Q4 2024 was $0.15, compared to a loss of $0.05 per share in Q4 2023[27]. - Total operating expenses for Q4 2024 were $49.0 million, a decrease from $58.0 million in Q4 2023[26]. - The total pre-tax income for the quarter was $1.016 million, a significant improvement from a pre-tax loss of $2.991 million in the prior year[36]. - Total corporate expenses decreased by 42% to $17.468 million from $30.005 million in the prior year[41]. - The company's total assets decreased to $2.304 billion from $2.363 billion year-over-year[45]. - Total debt decreased by $63.1 million to $625.4 million compared to September 30, 2024[47]. - The net debt ratio remained constant at 31% for the quarter[47]. - Adjusted EBITDA for the twelve months ended December 31, 2024, was $187.0 million, compared to $186.9 million in the previous year[51]. Sales and Market Performance - Global sales volume decreased by 1% year-over-year, with a 2.5% growth in the Surfactant business offset by demand weakness in Polymers[5][11]. - Surfactant net sales increased by 3% to $378.8 million, driven by a 5% increase in selling prices and a 1% growth in sales volume[11]. - Polymer net sales decreased by 12% to $129.8 million, with a 9% decline in sales volume primarily due to reduced global demand[11]. - Specialty Product net sales rose by 10% to $17.0 million, with sales volume increasing by 32%[12]. - Net sales for the three months ended December 31, 2024, were $525.6 million, down 1.2% from $532.1 million in the same period of 2023[39]. Operational Efficiency and Future Outlook - The company expects to start operations at its new Pasadena facility in Q1 2025, which is anticipated to drive volume growth and supply chain savings[14]. - The company aims for improved Adjusted EBITDA and positive free cash flow in 2025, driven by strategic investments and cost reduction initiatives[14]. - The company plans to continue focusing on product development and market expansion despite current economic challenges[22]. - Future outlook includes continued focus on product innovation and market expansion to drive revenue growth[53]. - The company plans to enhance operational efficiency through ongoing restructuring efforts and strategic investments in technology[53]. - The overall financial performance reflects a solid foundation for future growth, supported by strong user data and market demand[53]. Cash Flow and Expenses - Free cash flow for Q4 2024 was $32.1 million, with cash from operations amounting to $68.3 million[4][16]. - Research, development, and technical services expenses for Q4 2024 were $13.8 million, down from $15.3 million in Q4 2023[26]. - The company reported a significant reduction in deferred compensation expense, from $5.227 million in the prior year to an income of $574,000 in the current quarter[41]. - Depreciation and amortization expenses totaled $105.3 million, with $64.4 million from surfactants and $32.4 million from polymers[53]. - The company incurred a business restructuring and asset impairment expense of $12.0 million, along with environmental remediation costs of $1.0 million[53]. - Cash settled SARs resulted in a minor expense of $0.1 million, reflecting limited impact on overall financial performance[53].

Core Viewpoint - The market anticipates Stepan Co. (SCL) to report a year-over-year earnings increase despite lower revenues for the quarter ended December 2024, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Stepan Co. is expected to post quarterly earnings of $0.35 per share, reflecting a year-over-year increase of +6.1%, while revenues are projected to be $512.55 million, down 3.7% from the previous year [3]. - The consensus EPS estimate has been revised 20% lower in the last 30 days, indicating a reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate aligns with the Zacks Consensus Estimate, resulting in an Earnings ESP of 0%, which complicates predictions of an earnings beat [10][11]. - The stock currently holds a Zacks Rank of 4 (Sell), making it challenging to predict a positive earnings surprise [11]. Historical Performance - In the last reported quarter, Stepan Co. exceeded expectations by delivering earnings of $1.03 per share against an expected $0.64, resulting in a surprise of +60.94% [12]. - Over the past four quarters, the company has beaten consensus EPS estimates two times [13]. Industry Context - Chemours (CC), another player in the Zacks Chemical - Diversified industry, is expected to report earnings of $0.10 per share, indicating a year-over-year decline of -67.7%, with revenues projected at $1.36 billion, down 0.1% [17]. - The consensus EPS estimate for Chemours has been revised 8.9% lower in the last 30 days, but a higher Most Accurate Estimate results in an Earnings ESP of 25.00%, despite also holding a Zacks Rank of 4 [18].

Core Insights - The article emphasizes the importance of passive income investments that generate returns even when the investor is not actively managing them [1]. Group 1 - The author, Rick, has over 20 years of experience in trading stocks and options, and is recognized by major publications [1]. - Rick's book, "The Financially Independent Millennial," shares his journey to financial independence by age 35, despite a lack of early financial education [1]. - The content aims to simplify complex financial concepts for readers, making it accessible and engaging [1].

Core Viewpoint - Stepan Company will release its fourth quarter and full year 2024 earnings results on February 19, 2025, followed by a conference call to discuss financial and operational performance [1][2]. Group 1: Earnings Release Details - The earnings results will be available at approximately 7:00 a.m. ET on February 19, 2025 [1]. - A conference call will take place at 9:00 a.m. ET on the same day, hosted by the President and CEO, Luis E. Rojo, and the Interim CFO, Samuel S. Hinrichsen [2]. Group 2: Access Information - Participants can access the call via phone or webcast, with a registration link provided for phone access [3]. - A replay of the conference call will be available shortly after the event on the company's website [3]. Group 3: Company Profile - Stepan Company is a major manufacturer of specialty and intermediate chemicals, particularly known for surfactants used in cleaning and disinfection products, as well as polyurethane polyols for thermal insulation [4]. - The company operates modern production facilities across North and South America, Europe, and Asia [5]. - Stepan's common stock is traded on the New York Stock Exchange under the symbol SCL [5].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 1-4462 STEPAN COMPANY (Exact name of registrant as specified in its charter) Delaware 36-1823834 (State or other jurisdiction of in ...

Analyst's Disclosure: I/we have a beneficial long position in the shares of SCL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. While this article may sound like financial advice, please observe that the author is not a CFA or in any way licensed to give financial advice ...

Exhibit 99.1 1 Stepan Reports Third Quarter 2024 Results Northbrook, Illinois, October 30, 2024 -- Stepan Company (NYSE: SCL) today reported: Third Quarter 2024 Highlights • Reported net income was $23.6 million, up 88% versus prior year. Adjusted net income(1) was $23.7 million, up 61% versus prior year, largely due to higher margins and a lower effective tax rate. The year-over-year change in effective tax rate positively impacted net income by $6.8 million, or $0.30 per diluted share. • EBITDA(2) was $53 ...

NORTHBROOK, Ill., Oct. 30, 2024 /PRNewswire/ -- Stepan Company (NYSE: SCL) today reported: Third Quarter 2024 Highlights Reported net income was $23.6 million, up 88% versus prior year. Adjusted net income(1) was $23.7 million, up 61% versus prior year, largely due to higher margins and a lower effective tax rate. The yearover-year change in effective tax rate positively impacted net income by $6.8 million, or $0.30 per diluted share. EBITDA(2) was $53.0 million and Adjusted EBITDA(2) was $53.1 million, up ...

NORTHBROOK, Ill., Oct. 30, 2024 /PRNewswire/ -- Stepan Company (NYSE: SCL) today reported: The Board of Directors of Stepan Company has approved an increase of $0.01 per share, or 2.7%, on the quarterly cash dividend on the Company's common stock. The dividend of $0.385 per share is payable on December 13, 2024, to common stockholders of record on November 29, 2024. The increase marks the 57th consecutive year in which the quarterly dividend on the Company's common stock has increased. Corporate Profile Ste ...