Tuesday, specialty chemical maker Stepan Co. (SCL) reported a significant increase in fourth quarter profit, helped by improved operating results attributed to lower commodity raw material prices and expense controls. Revenue fell 15% for the quarter.
Stepan's fourth quarter net income surged to $8.8 million or $0.80 per share from $1.7 million or $0.15 per share in the prior year quarter.
The profit for the quarter is contributed by improvement in all three of the company's business segments as commodity raw material costs reduced, with successful cost control initiatives and a desirable surfactant product mix of laundry and personal care products that performed well during the economic downturn.
Excluding deferred compensation plan expense and gains on assets sold in the prior year, net income rose to $9.5 million or $0.87 per share from $0.4 million or $0.03 per share in the year-ago quarter.
Analysts polled by Thomson Reuters expected the company to earn a profit of $1.16 per share for the quarter. Analysts estimates typically exclude one-time items.
The Northfield, Illinois-based company's net sales fell 15% to $310.8 million from $365.3 million in the comparable quarter last year. The decline in sales was due to lower selling prices and volume that was hurt by falling commodity raw material costs, and the impact of foreign translation. Analysts expected revenue of $332.76 million for the fourth quarter.
Gross Profit for the quarter was $49.8 million, up $30.8 million a year ago and income from operations rose to $13.8 million from $7.4 million in the same quarter last year.
In the current quarter, operating expenses were $35.9 million compared to $23.5 million in the prior year quarter.
For the full year, net income was $63.0 million or $5.84 per share, compared to $37.2 million or $3.52 per share a year ago. Excluding deferred compensation, net income was $66.1 million or $6.13 per share, up from $40.2 million or $3.81 per share last year. Net sales for the full year were $1.28 billion, down from $1.60 billion in the prior year.
SCL is currently trading at $50.05, down $4.98 or 9.05% on a volume of 0.13 million shares on the NYSE.
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