Shares of Stepan, the chemical manufacturing company, experienced a notable surge in afternoon trading following the announcement of a dividend increase and positive third-quarter results. The stock rose by approximately 7% to $72.86, although it is still down by about 32% for the year.
Dividend Increase and Financial Performance
Stepan recently raised its quarterly dividend by one penny to 37.5 cents, signaling the company's commitment to shareholder value. However, the company did report a significant downturn in third-quarter profit, experiencing a drop of approximately 68%, and a 22% decline in sales. These figures fell below analysts' expectations, as reported by FactSet.
Recovery and Cost-Cutting Measures
Despite the challenging financial results, Stepan remains optimistic about its prospects. The company's Chief Executive, Scott Behrens, highlighted that Stepan's end markets are gradually recovering, and proactive cost-cutting measures have been implemented. Moreover, Stepan is reaching the final stages of its investment cycle aimed at enhancing North American production capacity. Anticipated to open by mid-2024, the Pasadena, Tex., plant will significantly contribute to these efforts.
Chief Executive Scott Behrens expressed confidence in the company's future, stating that he expects to see positive free cash flow next year. This outlook further reinforces Stepan's commitment to financial stability and sustainable growth.