Stepan Company reported its fourth‑quarter 2025 financial results, posting net sales of $553.9 million, a 5% year‑over‑year increase from $525.6 million in the same period a year earlier. The company recorded an adjusted net loss of $0.5 million, translating to an earnings per diluted share of –$0.02, a miss against the consensus estimate of $0.35‑$0.40.
Revenue fell short of expectations, coming in $16.7 million below the $570.6 million consensus. The shortfall was driven by weaker demand in the surfactants segment, where adjusted EBITDA declined 7% to $24.5 million, while the polymers segment saw a 9% rise in adjusted EBITDA to $9.3 million. Overall adjusted EBITDA for the quarter was $33.8 million, down 3% from $34.8 million a year earlier, although unadjusted EBITDA rose 21% to $43.3 million as higher pricing helped offset cost pressures.
The adjusted net loss and EPS miss were largely attributable to higher interest expense from the ramp‑up of the Pasadena, Texas alkoxylation facility, a less favorable effective tax rate, and lower surfactants earnings. Management noted that the start‑up costs associated with the new plant and the ongoing Project Catalyst initiative—aimed at generating $100 million in pre‑tax savings over two years—contributed to the profitability squeeze.
Looking ahead, Stepan reaffirmed its 2026 guidance, maintaining expectations for positive free cash flow and a rebound in adjusted EBITDA. The company also announced a quarterly cash dividend of $0.395 per share, its 58th consecutive increase, and reiterated its focus on portfolio optimization through asset divestitures in the Philippines and Lake Providence, Louisiana.
Market reaction to the results was negative, with the stock falling 11.5% in pre‑market trading and dropping more than 16% at one point on the day of the announcement. Investors reacted primarily to the earnings and revenue miss, which marked a departure from the company’s recent trend of meeting or exceeding forecasts.
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