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STEPAN REPORTS LOWER SECOND QUARTER RESULTS

 NORTHFIELD, Ill., July 27 /PRNewswire/ -- Stepan Company (AMEX: SCL) today reported lower second quarter earnings.
 Net income for the quarter declined 13 percent to $3,368,000, or 63 cents per share, compared to $3,883,000 or 71 cents per share for the second quarter of 1992. Net sales were $110,578,000, a decline of 3 percent from $113,909,000 reported a year earlier.
 Net income for the first six months of 1993 rose 4 percent to $8,055,000, or $1.52 per share, compared to $7,774,000, or $1.43 per share, which was the net income before accounting changes for the same period in 1992. Net income for the first half of 1992 was restated to reflect accounting changes adopted in the fourth quarter of 1992, and retroactively applied, effective Jan. 1, 1992. The restated net income for the first half of 1992 was $13,180,000, or $2.42 per share. Net sales for this period were $225,198,000 up 2 percent from $221,313,000 recorded in 1992.
 "Lower phthalaic anhydride (PA) earnings accounted for the majority of the decrease in second quarter earnings," said F. Quinn Stepan, chairman and president. "Low cost foreign material entering the U.S. created significant market pressures eroding PA sales volume and margins." PA represents 8 percent of company revenues.
 Surfactant earnings declined slightly because of a modest 2 percent reduction in domestic volume compared to the second quarter of 1992. In spite of higher European sales volume, competitive pressures resulted in narrower margins and earnings. Mexican operations experienced lower earnings on decreased sales volume.
 Specialty products earnings improved as a result of significantly higher margins on lower sales volume.
 Operating expenses declined 5 percent. Administrative expenses dropped 24 percent due to decreased legal and environmental expenses; the same period in 1992 included significant provisions for uninsured claims. Research and development expenses rose 19 percent.
 Interest expenses increased 21 percent as a result of higher average debt levels and lower capitalized interest, partially offset by a lower average borrowing rate.
 For the first six months, surfactants posted improved earnings compared to 1992; a strong first quarter performance more than offset the slightly weaker second quarter results. Lower PA volume and margins greatly impacted polymer earnings. Lower polyol volumes also affected polymer earnings. Specialty products earnings improved due to wider margins.
 "The downturn in the market for PA and the tougher economic environments in Europe and Mexico will make it difficult for us to achieve the record annual earnings level attained in 1992," said Mr. Stepan. "Surfactant earnings may show some improvement in the second half of the year despite the slow growth of the domestic economy."
 Stepan Company, headquartered in Northfield, is a leading producer of basic and intermediate chemicals used in household, industrial, personal care, agricultural and energy-related products. The stock is traded on the American and Chicago Stock Exchanges under the symbol SCL, and the Chicago Stock Exchange under the symbol SCLPR.
 STEPAN COMPANY
 Statement Of Income
 For The Three And Six Months Ended June 30, 1993 and 1992
 (Unaudited -- 000s Omitted)
 Three Months Six Months
 Periods ended
 June 30 1993 1992(A) 1993 1992(A)
 Percent Percent
 Change Change
 Net sales $110,578 $113,909 - 3 $225,198 $221,313 + 2
 Operating costs
 and expenses:
 Cost of sales 89,916 92,315 - 3 181,668 179,372 + 1
 Operating
 expenses 12,998 13,660 - 5 26,004 25,893 --
 Interest
 expense, net 1,904 1,569 +21 3,791 3,305 +15
 Total 104,818 107,544 - 3 211,463 208,570 + 1
 Pre-tax income
 before accounting
 changes 5,760 6,365 -10 13,735 12,743 + 8
 Provision for
 income taxes 2,392 2,482 - 4 5,680 4,969 +14
 Net income before
 accounting changes 3,368 3,883 -13 8,055 7,774 + 4
 Cumulative effect
 of accounting
 changes -- -- -- -- 5,406 --
 Net income $ 3,368 $ 3,883 -13 $ 8,055 $13,180 -39
 Net income per
 common share before
 accounting changes:
 Primary $0.63 $0.71 -11 $1.52 $1.43 + 6
 Fully diluted $0.61 $0.69 -12 $1.46 $1.38 + 6
 Cumulative effect
 of accounting changes
 per common share:
 Primary $ -- $-- -- $-- $0.99 --
 Fully diluted $ -- $-- -- $-- $0.96 --
 Net income per
 common share:
 Primary $0.63 $0.71 -11 $1.52 $2.42 -37
 Fully diluted $0.61 $0.69 -12 $1.46 $2.34 -38
 Average shares
 outstanding 4,948 5,459 - 9 4,944 5,455 - 9
 (A) The 1992 amounts have been restated to reflect the accounting changes that were adopted in the fourth quarter of 1992 and retroactively applied effective Jan. 1, 1992.
 -0- 7/27/93
 /CONTACT: Walter J. Klein, 708-446-7500, for Stepan/
 (SCL)


CO: Stepan Company ST: Illinois IN: CHM SU: ERN

WB -- NY089 -- 6426 07/27/93 16:39 EDT
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Publication:PR Newswire
Date:Jul 27, 1993
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