Specialty and intermediate chemicals firm Stepan Company (SCL) Tuesday reported lower profit for the first quarter on the back of lower surfactant margins and polymer volume. The firm further said it has agreed with Bayer MaterialScience to acquire their North American Polyester Resins business, including the production facility located in Columbus, Georgia. Financial terms of the transaction were not disclosed. Subject to conditions, the deal is expected to close within four to six weeks. The acquisition is anticipated to be slightly accretive to the 2013 earnings.
For the quarter, net income attributable to company stood at $19.03 million, down from $22.3 million a year earlier. On a per share basis earnings totaled $0.83 versus $0.98 a year earlier.
On a per share basis, excluding deferred compensation, the firm posted earnings of $0.94 compared with $1.05 last year.
Two analysts on average polled by Thomson Reuters estimated earnings per share of $1.18 for the quarter. Analysts estimates typically exclude one-time items.
The company clocked net sales of $456.54 million, down from $465.26 million last year. Analysts were looking for revenue of $456 million.
Looking forward, the firm said surfactants should experience improved margins as the year progresses and polymers volume should improve in the second quarter.
The business to be acquired has sales of approximately $64 million. Commenting on the development, F. Quinn Stepan, Jr., CEO of Stepan Company, said, "This acquisition will significantly expand Stepan's polyol product offering. Stepan is a leading producer of polyester polyol used in rigid insulation foam. This acquisition will diversify our polyol offering and accelerate our efforts to grow in CASE and PUSH applications..."
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