Specialty chemicals won’t make the best fodder for chatting at your next cocktail party. Mention butadiene and styrene, and your guests will start looking for their coats. But when you know what these chemicals do and that they’re vital for product profitability, the conversation becomes more interesting.

Omnova Solutions’s products, for example, help make diapers more absorbent without bulk. Diaper makers love to plaster new and improved on packaging while collecting a higher price from customers. Other chemicals Omnova sells make seating upholstery more durable or give those vinyl seats in your new car the feel and smell of real leather. Omnova’s chemical menu is long, and its list of customers is deep.

Dazzling Earnings

Once you convince your guests that Omnova’s (NYSE: OMN) products are impressive, you can dazzle them with its financials. Earnings more than doubled the first six months of this year and are expected to grow 58% for the full fiscal year 2016 and another 26% in 2017. Our $15 target offers a potential 66% upside.

This earnings surge is mainly thanks to a 2014 restructuring that included selling off less profitable lines, introducing more profitable specialized products, and closing excess manufacturing capacity. With its core business stabilized and sales of more profitable products growing, earnings are flourishing, and the cash flow they generate is used to reduce debt. Interest eats up almost half of profits, so cutting interest costs will boost earnings significantly.

Wall Street loves booming revenue. Some of the most overpriced stocks have colossal revenue growth, but that’s a love affair that can end badly. Jacked revenue can mask operational mistakes. For example, if a company overspends on marketing, hires too many salespeople or makes a small sourcing mistake, higher revenue hides those errors from investors.

Investors are often surprised to see increased profits when revenue is declining. It’s a rare feat, but if a company with pared-down expenses increases revenue, profits can jump like a coiled spring.

In the first six months of this year Omnova’s profits rose to 22 cents per share from 10 cents despite a 12% drop in revenue. Profit margins expanded as the company sold off an unprofitable division in India, closed several manufacturing plants and moved production to more efficient facilities.

The company’s performance chemicals products, which make up over 70% of sales, are declining. The category includes revenue from chemicals used to produce paper, which has been hit hard. Thanks to the Internet, the North American paper market has been shrinking for years, and declining profits have dragged down Omnova’s earnings. Sales to the paper industry have now stabilized and make up just 11% of total revenue, down from 30%. As a result, the slimmed-down product line is more profitable.

The company’s engineered surfaces category includes laminates and films, products with innovative specialty chemicals introduced last year. These chemicals help make store fixtures, recreational vehicles  and construction materials. The company’s 3D laminates, for example, go into the luxury vinyl flooring seen in many retailers, or into 3D visual wall displays.

Engineered surfaces are Omnova’s most profitable segment. As they become a larger part of the mix, profits will rise. In the second quarter ending in May, the segment reported 13.4% profit margins versus 12% for performance chemicals. Both engineered surfaces and performance chemicals recorded big jumps in profitability due to cost cutting and a better product mix.

The company’s specialty chemical product lines, many of which were introduced last year, have shown volume growth for the past three quarters. These product lines generate higher than average profits and should accelerate earnings growth as sales continue to ramp up.

Potential Risks

This story is not without risks. Omnova holds a barrel of debt. In 2011 the company borrowed $296 million to buy French chemical manufacturer Eliokem, bringing its total debt to $453 million. Eliokem gave Omnova a European presence and added new product lines.

As of the second quarter, $113 million of the debt had been paid down, but interest payments still eat up a large chunk of earnings. Management has made it clear its strong cash flow will be used to reduce debt. Also, on its second-quarter conference call, the company noted that a temporary labor strike at the plant for one of its raw material suppliers will hurt third-quarter earnings. The strike has been resolved, and investors are well aware of the $2 million to $3 million charge that will occur this quarter.

The benefits of weeding out less profitable lines and cultivating more profitable ones are just taking root for Omnova. As its base business finds stability, growth in new specialty chemicals, that will buoy profits. Lower interest payments resulting from debt reduction have yet to be penciled into analysts’ numbers, leaving further upside in earnings estimates.