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STEPAN REPORTS LOWER THIRD QUARTER EARNINGS

 NORTHFIELD, Ill., Oct. 21 /PRNewswire/ -- Stepan Company (AMEX: SCL) today reported lower third quarter earnings.
 Net income for the third quarter of 1993 decreased 17 percent to $3,170,000, or 59 cents per share, down from $3,800,000, or 70 cents per share, recorded in the same quarter of 1992. Net sales for the quarter rose one percent to $111,111,000, up from $109,897,000 for the comparable 1992 quarter.
 Net income for the nine month period of 1993 decreased three percent to $11,225,000, or $2.10 per share, compared to 1992 net income of $11,574,000, or $2.13 per share, before accounting changes. Net income for the first nine months 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 nine months of 1992 was $16,980,000, or $3.13 per share. Net sales for the nine month period were $336,309,000, up two percent from $331,210,000 recorded in 1992.
 "Actually, pre-tax income increased seven percent during the third quarter of 1993 compared to the 1992 third quarter," said F. Quinn Stepan, chairman and president. "Higher tax rates accounted for the 17 percent decrease in third quarter net income." The recently enacted tax rate resulted in an increase in the tax provision of $726,000, or 15 cents per share. Most of the charge is attributable to restating previously deferred tax liabilities to reflect the higher tax rate and consequently will not have a significant impact on fourth quarter results.
 Surfactants, which account for 73 percent of sales, showed improved results from a two percent increase in volume. Most of that increase related to the coma?ny's extensive commercial customer base. Volumes relating to larger national customers declined. Mexican operations experienced decreased sales volume.
 Earnings from polymers, which represent 18 percent of sales, declined due to a significant decrease in phthalic anhydride (PA) sales volume and margins. Earnings from polyurethane polyols improved resulting from a six percent increase in volume.
 Operating expenses increased one percent over the same period in 1992. Higher research expenditures were largely offset by reduced administrative expenses.
 Interest expense increase 21 percent mostly as a result of lower capitalized interest associated with the company's capital expenditure program.
 For the first nine months, surfactants reported improved earnings on a three percent increase in volume compared to 1992. Polymer earnings declined as a result of lower PA volume and margins. Improved margins on lubricant products significantly increased specialty products earnings.
 "We expect 1993 pre-tax income, excluding the unusual charges recorded in the fourth quarter of 1992, will be flat in comparison to the prior year," said Mr. Stepan. "The downturn in the market for PA and disappointing results for Mexico prevented earnings growth in 1993. On the positive side, we expect domestic surfactants will have a very strong year. We expect net income will be down for the year, due to the higher 1993 tax rate and the accounting changes recorded in 1992."
 Stepan Company, headquartered in Northfield, Ill., 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 Exchange under the symbol SCL and the Chicago Stock Exchange under the symbol SCLPR.
 STEPAN COMPANY STATEMENT OF INCOME
 For The Three And Nine Months Ended Sept. 30, 1993 And 1992
 (Unaudited -- 000s Omitted)
 Periods ended Three Months Nine Months
 Sept. 30, 1993 1992(A) Pct. 1993 1992(A) Pct.
 Change Change
 Net sales $111,111 $109,897 + 1 $336,309 $331,210 + 2
 Operating costs
 and expenses:
 Cost of sales 89,962 89,635 - 271,630 269,007 + 1
 Operating
 expenses 12,592 12,481 + 1 38,596 38,374 + 1
 Interest
 expense, net 1,869 1,551 +21 5,660 4,856 +17
 104,423 103,667 + 1 315,886 312,237 + 1
 Pre-Tax Income
 Before accounting
 changes 6,688 6,230 + 7 20,423 18,973 + 8
 Provision for
 income taxes 3,518 2,430 +45 9,198 7,399 +24
 Net income
 before accounting
 changes 3,170 3,800 -17 11,225 11,574 - 3
 Cumulative effect
 of accounting
 changes -- -- - -- 5,406 -
 Net income $ 3,170 $ 3,800 -17 $11,225 $16,980 -34
 Net income per
 common share
 before accounting
 changes
 Primary $ 0.59 $ 0.70 -16 $ 2.10 $ 2.13 - 1
 Fully diluted $ 0.58 $ 0.68 -15 $ 2.04 $ 2.07 - 1
 Cumulative effect
 of accounting
 changes per
 common share
 Primary $ -- $ -- - $ -- $ 1.00 -
 Fully diluted $ -- $ -- - $ -- $ 0.97 -
 Net income per
 common share
 Primary $ 0.59 $ 0.70 -16 $ 2.10 $ 3.13 -33
 Fully diluted $ 0.58 $ 0.68 -15 $ 2.04 $ 3.04 -33
 Average shares
 outstanding 4,952 5,322 - 7 4,947 5,411 - 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- 10/21/93
 /CONTACT: Walter J. Klein of Stepan Company, 708-446-7500/
 (SCL) CO: Stepan Company ST: Illinois IN: CHM SU: ERN


LD -- NY107 -- 5445 10/21/93 16:46 EDT
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Publication:PR Newswire
Date:Oct 21, 1993
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