By David Reed, UT EditorNorthfield, Illinois-Stepan Co. reported a 19-percent increase in sales in the fourth quarter of 2004, to $239 million, primarily thanks to strong growth in sales of phthalic anhydride and polyurethane polyols-its Stepanpol aromatic polyester polyols, which are used in making rigid foams and other products-and PU systems. This resulted in an identical rise in sales for the whole year, which took them to $936 million, the firm said in a 10 Feb statement.Gross profit rose 14 percent for the period, reaching $24 million, with the full year to 31 Dec. showing a 7-percent rise in gross profit, to $111 million, the statement showed. However, the company’s net income showed the largest change: although the fourth quarter figure was just $601 000, this compares favourably with the $3.4-million loss of the fourth quarter in the prior year. And, over the full year, net income rose 110 percent, to reach $10.3 million, 11 percent on net sales, Stepan reported.The firm’s overall sales volumes, however, showed no increase, the statement said, attributing much of the improvement in results over the year to higher selling prices due to rising raw material costs, $32.5 million, and the translation effect of the weaker dollar, $5.6 million.The firm’s polymer unit, which incorporates the two product types, accounts for 21 percent of total company sales, Stepan indicated. Polymer volume rose by 17 percent on strong industry-wide demand, the company continued, boosting operating income for the segment by 31 percent.Gross profit grew by $7.2 million, or 7 percent, driven by the growth in polymer volume, the company statement also showed.”We head into 2005 with optimism,” said F. Quinn Stepan, chairman and chief executive officer, in the prepared statement. “Business fundamentals look good in North America. Polymers are making unprecedented growth in volume due to strong demand and greater global market penetration,” he added.The firm’s other businesses-surfactants, representing 76-percent of the firm’s business, and speciality products-had a tougher year. Surfactant operating income rose just 2 percent for the whole year, and weak fourth-quarter volumes coupled with margin weakness in Europe, adversely affected income in the latter period, the statement indicated.”While pleased with the improvement in 2004 earnings, we have much work ahead to achieve the operating margin and return on capital goals that we have set for ourselves,” Quinn concluded.”
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