Stepan Company (NYSE: SCL) shares plummeted 6.01% in Wednesday's trading session following the release of its first-quarter 2025 earnings report and subsequent conference call. The significant drop suggests investors were disappointed with the mixed results and ongoing concerns about potential tariff impacts.

While the company reported a 12% increase in adjusted EBITDA to $57.5 million and a 32% rise in adjusted net income to $19.3 million, several factors may have contributed to the negative market reaction. The Surfactants segment saw volume growth of 3%, driven by strong performance in agricultural and oilfield markets. However, the Polymers segment faced challenges, including less favorable product mix and high-cost inventory carryover, which offset the 7% volume growth in this division.

Investors appear particularly concerned about the potential impact of tariffs on Stepan's business. During the call, CEO Luis Rojo acknowledged the uncertainty surrounding tariffs, stating, "This is a very volatile and uncertain dynamic that we all have to navigate through right now." The company is working to mitigate potential tariff effects through changes in sourcing strategy and pricing adjustments, but the full impact remains unclear. Additionally, while the company expressed cautious optimism about delivering full-year adjusted EBITDA and net income growth, along with positive free cash flow in 2025, the market seems to be taking a more skeptical view given the current economic uncertainties.