Shares of Stepan Company (SCL), a producer of specialty and intermediate chemicals, are surging in afternoon trading after reporting third-quarter financial results that surpassed analysts' expectations. With its Q3 earnings report, the company announced a dividend increase.

WHAT'S NEW: Before the market open this morning, Stepan morning reported Q3 adjusted earnings per share of $1.06 on revenue of $445M against analysts' estimates of 95c and $444.5M, respectively. Adjusted net income increased 16% to $24.5M year-over-year as polymer operating income jumped 10% to $27.1M versus the prior year. The company attributes the increase to a 10% increase in volumes. The company noted that on October 3, it closed on its acquisition of Tebras/PBC in Brazil, which will allow Stepan to expand and diversify its customer base in Brazil and provide an opportunity to sell the company's broader surfactant portfolio.

OUTLOOK: Stepan President and Chief Executive Officer F. Quinn Stepan, Jr. commented that "After a record nine months, we anticipate headwinds in the fourth quarter due to higher raw material costs versus fourth quarter of 2015, scheduled maintenance shutdown of our phthalic anhydride unit and accelerated depreciation resulting from the closure of our Canadian plant." The executive said Stepan's base business should continue to benefit from higher polyol volumes, increased asset utilization and enhanced internal efficiencies and said he believes the Company is positioned for continued growth in 2017.

DIVIDEND RAISE: Separately, Stepan said this morning that on October 17, its board declared a 7.9% increase in its quarterly cash dividend to 20.5c per share. The increased dividend, which is payable on December 15, to common stockholders of record on November 30, marks the forty-ninth consecutive year in which the quarterly dividend rate on the company's common stock has increased.

PRICE ACTION: Shares of Stepan are up 9.8% to $76.98 in afternoon trading.

OTHERS TO WATCH: shares of other specialty chemical makers are also up in afternoon trading, including Koppers Holdings (KOP), KMG Chemicals (KMG) and Huntsman (HUN).