Dow Inc. (DOW), one of the world’s largest chemicals and materials manufacturers, reported first-quarter results on Thursday that beat Wall Street expectations for both revenue and adjusted earnings despite posting a net loss.
Shares of Dow (DOW) rose 1.8% in premarket trading. As of Wednesday’s close, the stock was up 34% over the prior 12 months.
Net sales fell 6% to $9.79 billion from $10.43 billion a year earlier, but still topped analysts’ consensus estimate of $9.67 billion. Operating earnings per share, the company’s adjusted measure, showed a loss of $0.14 a share, better than the expected adjusted loss of $0.29 a share.
Net income fell to a loss of $445 million, or $0.74 a share, from a loss of $290 million, or $0.44 a share, a year earlier.
Cost cuts help offset weak pricing
Dow (DOW) said lower prices and softer demand weighed on results, though benefits from its cost reduction efforts helped cushion the impact.
“In the first quarter, our results reflect the growing impact of Dow’s self-help actions,” Chief Executive Jim Fitterling said in the earnings release.
Volume declined 2% year over year, while local prices fell 7%. Gains in packaging plastics volumes were offset by lower sales in industrial intermediates and infrastructure products, partly tied to conflict-related disruptions in the Middle East.
Packaging business leads segments
Dow’s (DOW) Packaging & Specialty Plastics unit, its largest segment, generated $4.9 billion in revenue, down 7% from a year earlier. Performance Materials & Coatings sales were roughly flat at $2.08 billion, while Industrial Intermediates & Infrastructure revenue declined 8% to $2.63 billion.
The coatings and silicones businesses benefited from stronger demand tied to electronics, home and personal care applications.
Cash flow improves, outlook firms
Dow (DOW) reported earnings before interest, taxes, depreciation and amortization of $873 million, compared with $944 million a year earlier. Cash provided by operating activities from continuing operations jumped to $1.12 billion from $104 million a year earlier.
Fitterling said pricing actions across businesses and regions were already creating momentum, while the company’s manufacturing footprint and supply chain flexibility positioned it for improved growth, wider margins and stronger shareholder returns.
Dow (DOW) makes plastics, industrial chemicals, coatings materials and silicones used in packaging, construction, automotive, electronics and consumer products. Its well-known brands include Styrofoam insulation, Silastic silicone materials and Dowlex polyethylene resins used in flexible packaging.
