The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Stepan missed slightly on revenues and missed expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share improved significantly.
Gross margins shrank, operating margins increased, net margins grew.
Stepan booked revenue of $444.2 million. The two analysts polled by S&P Capital IQ expected revenue of $452.1 million on the same basis. GAAP reported sales were 23% higher than the prior-year quarter's $360.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $1.36. The two earnings estimates compiled by S&P Capital IQ forecast $1.46 per share on the same basis. GAAP EPS of $1.17 for Q4 were 54% higher than the prior-year quarter's $0.76 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 13.5%, 50 basis points worse than the prior-year quarter. Operating margin was 4.8%, 90 basis points better than the prior-year quarter. Net margin was 3.0%, 60 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $484.9 million. On the bottom line, the average EPS estimate is $2.13.
Next year's average estimate for revenue is $2.09 billion. The average EPS estimate is $8.90.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 56 members out of 62 rating the stock outperform, and six members rating it underperform. Among 22 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 19 give Stepan a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Stepan is buy, with an average price target of $97.00.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.