SCL: 1Q18 Miss; Lowering Estimates
- 1Q18 (Mar) adjusted EPS was $1.37 (vs $1.36 year earlier), 10 cents under our projection due to weakness in Polymers (24% of sales) from increased competition and weather-related project delays;
- Our 2018 EPS estimate is now $4.76 (from $5.06), up 2% from a record 2017;
- For 2019, our EPS estimate is now $5.37 (from $5.63), up 13% from our 2018 estimate.
Stepan is engaged in the production and sale of specialty and intermediate chemicals, which are sold to other manufacturers for use in a variety of end products. The company has three reportable segments: Surfactants, which are used in a variety of consumer and industrial cleaning compounds as well as in agricultural products, lubricating ingredients, oil field chemicals and other applications; Polymers, which are used primarily in plastics, building materials, refrigeration systems and coatings, adhesives, sealants and elastomers applications; and Specialty Products, which are used in food, flavoring, nutritional supplement and pharmaceutical applications.
Great Lakes Review is located in Cleveland, Ohio, was founded in 1981 and became a division of Wellington Shields & Co. LLC in 2011. Great Lakes Review is a research boutique focused on the fundamentally-oriented investor seeking companies that dominate their respective specialty niche regardless of industry. The objective is to make money for the long-term by gradually accumulating a diversified portfolio from a universe of no more than 30 companies. Although short-term-oriented accounts will be alerted to trading opportunities, aggressive sell recommendations are triggered only by a deterioration in long-term fundamentals, not by short-term blips or investor fancy. Coverage of those names that lose their earnings momentum or earnings predictability may be dropped and replaced with more vital candidates.
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