Stepan Company closed the sale of its Philippine subsidiary, Stepan Philippines Quaternaries, Inc., on November 14, 2025. The transaction transferred the company’s manufacturing facilities in Bauan, Batangas, to Masurf, Inc., a unit of Musim Mas Holdings Pte. Ltd. A tolling agreement was immediately put in place to keep Southeast Asian customers supplied while the transition takes place.
The divestiture is part of Stepan’s broader strategy to sharpen its focus on higher‑margin specialty and intermediate chemical businesses. By shedding a legacy asset that has lower profitability, the company aims to reallocate capital and operational resources toward growth areas such as agriculture, oilfield, and polymer markets, while maintaining service continuity through the new tolling partnership.
In its most recent earnings release, Stepan reported Q3 2025 revenue of $590.28 million, up 8% year‑over‑year, driven by higher selling prices and a favorable product mix. Net income fell to $10.8 million, a 54% decline from the prior year, and adjusted net income also dropped 54%. Earnings per share were $0.48, missing the consensus estimate of $0.62 by 22.6%. The miss was largely attributable to lower net income and the impact of a 2024 fraud‑related expense that was not fully recovered in the quarter.
The market reaction has been negative. Stepan’s shares have slipped 33% year‑to‑date and are trading near their 52‑week low. Weiss Ratings downgraded the company from “hold” to “sell,” while Seaport Research raised its FY2025 EPS estimate from $2.14 to $2.20, reflecting divergent analyst views on the company’s near‑term prospects.
CEO Luis Rojo said the transaction “is an important step in sharpening our focus on core growth assets” and added that the tolling agreement “ensures uninterrupted service and growth opportunities for our customers in Southeast Asia.” He also expressed gratitude to the Philippine team for their contributions over three decades and confidence that the facility will thrive under Masurf’s stewardship.
The sale positions Stepan to strengthen its balance sheet and operational focus, but the Q3 earnings miss highlights ongoing cost pressures and the need for continued margin improvement. Management’s emphasis on higher‑margin segments and strategic investments signals a long‑term confidence in the company’s trajectory, even as short‑term profitability remains under pressure.
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