Stepan Company Q3 2026: EPS beats expectations, turnaround accelerates
As seen on the 24/7 Wall St. homepage on October 28, 2026.
Stepan's second straight large beat confirms the turnaround is real: Surfactants adjusted EBITDA rose 27% year over year. Management also raised the dividend while guiding to full-year EBITDA growth and further debt paydown.
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Stepan Company reported adjusted EPS of $0.94 for its third quarter of 2026, exceeding expectations, with revenue also topping expectations. Revenue grew 17% year over year, a signal that volume recovery is translating into real dollars.
The engine behind the quarter was Surfactants, the company's largest segment, where adjusted EBITDA rose 27% year over year on organic volume growth. Gains spanned Consumer Products, Construction and Industrial, and Oilfield end markets. Polymers contributed as well, with North American volumes in Spray Foam, Rigid, and Phthalic Anhydride each growing double digits.
This was the second consecutive quarter of large upside surprises, following a Q2 2026 result where adjusted EPS of $1.18 exceeded expectations. Before that run, the company posted a loss in Q4 2025 and missed expectations in three of the four quarters spanning Q2 2025 through Q4 2025. That prior stretch makes the current streak more meaningful for investors reassessing the turnaround thesis.
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Company CEO Luis E. Rojo attributed the quarter's 18% adjusted EBITDA growth to global volume growth, margin recovery, and savings from Project Catalyst, a restructuring initiative that included approximately 100 salaried position reductions. Restructuring charges and an environmental remediation reserve adjustment at its Maywood, NJ site pulled GAAP EPS to $0.78.
Management raised the quarterly dividend to $0.405 per share, marking the 59th consecutive year of dividend increases. The company also closed a land sale near its Millsdale site in October, directing proceeds toward debt reduction. Full-year guidance calls for adjusted EBITDA growth, positive free cash flow, and continued deleveraging.
Mentioned: SCL