NORTHFIELD, Ill. -- Shares of specialty chemical maker Stepan Co. tumbled nearly 6 percent Wednesday after the company's third-quarter earnings fell short of Wall Street estimates.
The Northfield, Ill., company also announced a 2-for-1 stock split and a 14 percent increase in its common stock dividend.
But shares fell $5.71, or 5.9 percent, to $91.08 in afternoon trading. They have traded in a range of $71.45 to $101.57 in the past year.
Stepan reported net income of $20.2 million, or $1.78 per share, for the quarter ended Sept. 30. That's up from $19.2 million, or $1.70 per share, a year earlier.
Excluding deferred compensation, the company said the recent quarter's profit totaled $1.82 per share. Revenue for the quarter was $441 million, down 12 percent from the third quarter of last year.
The performance fell far short of Wall Street expectations. Two analysts polled by FactSet expected earnings of $2.01 per share, on average.
Stepan said its sales volume fell 3 percent during the quarter, and lower selling prices from falling raw material costs accounted for a 6 percent revenue drop. Foreign currency translation, mainly the weakening of the euro against the U.S. dollar, also cut revenue 3 percent, the company said in a statement.
The company also said it expects to deliver solid earnings growth for the full year. Income excluding deferred compensation is up 16 percent for the first nine months.
"While the economy has created a more challenging environment, we remain committed to our strategy to globalize and improve our product mix to deliver future earnings growth," Stepan said in a statement.
The company said its board approved the stock split on Tuesday. The split, in the form of a 100 percent stock dividend, will be paid on Dec. 14 for shareholders of record on Nov. 30. The new quarterly dividend also will be paid on Dec. 14. It will be 16 cents per share for the quarter, or 64 cents per share annually, on the split shares.
Stepan said the split will cut the share price in half, making it possible for more investors to trade in Stepan stock.