07.20.16
Helped by lower raw material costs, Stepan Company, Northfield, IL, said second quarter net income surged 65% to a record $27.9 million. Surfactant operating income rose 12% to $27.2 million due to internal efficiency programs, lower raw material costs and an 11% volume increase. However, surfactant sales fell less than 1% to $298.6 million during the period. Polymer sales rose 1% to $134.4 million and specialty product sales increased 13% to $21.5 million.For the three months, Stepan's quarterly sales rose less than 1% to $454.6 million.
For the year, corporate sales declined 1% to $900.5 million. Surfactant sales dropped 3% to $608.5 million, while polymer sales rose 2% to $248.3 million and specialty product sales jumped 10% to $43.5 million. But net income improved 45% to $55.5 million.
"After a record first half, we remain optimistic about our core business for the balance of the year," said CEO F. Quinn Stepan Jr. "Our business should continue to benefit from higher laundry volumes within our surfactant business and rigid polyol volumes within polymers."
Moving forward, Stepan expects higher raw material costs to slightly reduce margins, but internal efficiency programs should continue to deliver meaningful results. according to Stepan.
"However, costs associated with a planned 30 day shutdown of our plant in Germany, accelerated depreciation and plant shutdown costs related to the closure of our Canadian plant, and lower construction activity in China should negatively impact the balance of 2016," he warned. "Overall, we continue to believe earnings for the year should grow."
For the year, corporate sales declined 1% to $900.5 million. Surfactant sales dropped 3% to $608.5 million, while polymer sales rose 2% to $248.3 million and specialty product sales jumped 10% to $43.5 million. But net income improved 45% to $55.5 million.
"After a record first half, we remain optimistic about our core business for the balance of the year," said CEO F. Quinn Stepan Jr. "Our business should continue to benefit from higher laundry volumes within our surfactant business and rigid polyol volumes within polymers."
Moving forward, Stepan expects higher raw material costs to slightly reduce margins, but internal efficiency programs should continue to deliver meaningful results. according to Stepan.
"However, costs associated with a planned 30 day shutdown of our plant in Germany, accelerated depreciation and plant shutdown costs related to the closure of our Canadian plant, and lower construction activity in China should negatively impact the balance of 2016," he warned. "Overall, we continue to believe earnings for the year should grow."