Company News
July 24, 2025
Urethane Highlights from Dow’s Earnings Call
Dow Inc. (DOW) Q2 2025 Earnings Call Transcript
Jul. 24, 2025 10:33 AM ETDow Inc. (DOW) StockDOW
Dow Inc. (NYSE:DOW) Q2 2025 Earnings Conference Call July 24, 2025 8:00 AM ET
Company Participants
Andrew Riker – Vice President of Investor Relations
James R. Fitterling – Chairman & CEO
Jeffrey L. Tate – Chief Financial Officer
Karen S. Carter – Chief Operating Officer
James R. Fitterling
Thank you, Andrew. Beginning on Slide 3. The prolonged down cycle our industry has been experiencing was further amplified this quarter by heightened trade and geopolitical uncertainties, which have strained profitability across our industry. In this environment, it is critical that we successfully navigate the near-term, protect Dow’s financial flexibility and advance our near-term growth initiatives to support higher earnings as the industry recovers.
Additionally, growing signs of oversupply from newer market entrants being exported to other regions and anticompetitive economics requires an aggressive industry response and regulatory action to restore competitive dynamics. Given these challenges, we remain focused on driving operational discipline in everything we do.
In the second quarter, net sales were $10.1 billion, down 7% versus the year ago period, reflecting declines in all operating segments. Sequentially, net sales decreased 3% as seasonally higher demand in Performance Materials & Coatings was more than offset by declines in our other operating segments.
EBITDA was $703 million, which is also lower than the same period last year. Following a significant analysis and consideration, we announced this morning that Dow would implement a 50% dividend reduction effective in the third quarter of this year. This decision was not taken lightly as we understand the importance our shareholders place on the dividend and we carefully considered this on top of the financial impacts that we model. The dividend is a key element of our investment thesis, and that is not changing. We remain committed to targeting a competitive dividend across the economic cycle. However, given the current lower for longer earnings environment and the lack of a clear line of sight to a recovery for our industry, this is the most prudent way to maintain financial flexibility and maximize long-term value for our shareholders.
Also in the second quarter, we progressed several near-term cash support levers. The close of our strategic infrastructure asset partnership named Diamond Infrastructure Solutions delivered $2.4 billion of cash for Dow in the second quarter and has already captured growth opportunities with new customers. We also expect to receive cash proceeds from the NOVA judgment this year,
and consistent with our best owner mindset, we recently announced 2 noncore product line divestitures totaling approximately $250 million at attractive EBITDA multiples of around 10x. These divestitures are additive to our announcement that we will shut down 3 upstream assets in Europe to address structural challenges in that region.
We are confident that these actions paired with the completion of our near-term incremental growth projects will support long-term value creation. Additionally, we are accelerating progress on our $1 billion in cost savings actions, where we now expect to deliver approximately $400 million this year. We are committed to continuing Dow’s track record of operational and financial discipline, executing near-term actions to maximize shareholder value and navigating the current environment all to better position the company for profitable growth and higher shareholder returns as the industry recovers.
Karen S. Carter
Thank you, Jim. In the second quarter, our teams continued to focus on price management to restore margins as we prioritize volume in attractive end markets. As we have done for the past several quarters, we are closely monitoring the macros across the markets we serve, pulling all levers to help mitigate the current lower for longer earnings environment as well as the impact brought on by recent trade and tariff uncertainties.
Next, turning to our Industrial Intermediates & Infrastructure segment on Slide 5. Net sales declined both year-over-year and sequentially, as market conditions across the segment remains challenging, particularly in our polyurethanes and Construction Chemicals business, which has high exposure to durables and building and construction end markets. Volume declined 2% compared to the year ago period. Lower polyurethanes and construction chemicals volumes and EMEAI where we continue to see increasing import activity from competitors in China were partially offset by higher industrial solutions volumes across data center cooling and gas treating applications.
Sequentially, a decline in demand for deicing fluid following the winter month was only partially offset by a modest seasonal uplift in building and construction applications, which was lower than expected in a typical year. Operating EBIT for the segment decreased versus the year ago period as well as sequentially, primarily driven by lower prices and higher planned maintenance activity. This included activities related to the start-up of our new alkoxylation unit in Seadrift, Texas.
The new capacity representing the completion of one of our near-term growth investments will support earnings growth beginning in the third quarter and beyond. We also recently finalized a long-term agreement with a major consumer brand owner to supply millions of pounds of low-carbon solutions, demonstrating our ability to capitalize on innovation, that are meeting the needs of our customers and their sustainability commitments to consumers.
Jeffrey L. Tate
In the Industrial Intermediates & Infrastructure segment, we expect third quarter EBITDA to be approximately $85 million higher than the second quarter. This expected earnings uplift reflects our expectations for higher volumes from the start-up of our new alkoxylation facility.
In Polyurethanes, we anticipate higher volumes in both MDI and polyols although margins remained under pressure sequentially, driven by fierce price competition with Chinese exports into both Europe and Latin America. Following the heavy turnaround schedule in second quarter, II&I would have a sizable tailwind in the third quarter, in addition to the ramp and cost reductions. This segment will also experience headwinds from lower equity earnings at Sadara.
In May, we finalized our strategic partnership with Macquarie Asset Management for the sale of a minority equity stake in select U.S. Gulf Coast infrastructure assets, receiving approximately $2.4 billion in initial cash proceeds from the transaction. The new entity, Diamond Infrastructure Solutions recently announced the deal with a Climate Tech company named Again to build a first-of-its-kind plant to recycle waste CO2 emissions from an on-site tenant in our Texas City Industrial Park. This agreement is one of many growth opportunities, the Diamond Infrastructure Solutions business model is set up to enable with both new and existing customers.
And as a reminder, Macquarie has the option to increase their stake to 49% within 6 months of closing, which would occur no later than November. This would increase total cash proceeds from this new partnership to approximately $3 billion per Dow this year.
Looking into the second half of the year, we also expect to receive cash proceeds of approximately $1.2 billion from the resolution for damages related to the jointly owned ethylene assets with NOVA Chemicals. So in total, we expect these actions to provide more than $6 billion in near-term cash support. And building on this, Karen will now cover the work we’re doing to drive execution, ensure strong operational performance and enable higher near-term returns.
Patrick Duffy Fischer
Two questions. One, Jim, can you just talk about on the anticompetitive stuff which product chains are being most impacted there? And then where has legal actions been taken already? And where should we expect it going forward? And then could you just clarify how much of the July price increase is actually baked into your Q3 guide?
James R. Fitterling
Yes. I’ll take the first part, and I’ll ask Karen to take the second part. Polyurethanes, you’ve seen a lot of that activity, Duffy. And of course, there’s a lot of overcapacity that’s been built there. And so there’s been a lot of move there. And it’s a low demand environment. So that’s created that kind of pressure. Although it’s not a particular area for us, you see it in chlorine, aromatics. If you spots like that, you see that same kind of an impact.
We’re starting to see a bit of it in polyethylene. So we’ve seen Brazil take action, so Latin America. We’re starting to see a little bit of that potentially in Europe, although I don’t think it’s been as prevalent in Europe on the plastic side. We’re eyes wide open in all areas for that. And then I think you — obviously, you’ve seen it in electric vehicles in Europe. That was one of the early cases where there was a lot of pressure in Europe on EVs. So it’s not just a chemical industry, but in the chemical industry, there’s a significant activity.
Karen, do you want to talk about pricing and how much is in that testament?
Karen S. Carter
So all of our July price increase that we have on the table is incorporated into our results. And again, we fully expect to achieve that. We are pushing to achieve that because, again, the current integrated margins are not only low, but they’re unsustainable. So we are fully baking in integrated margin expansion as we get into third quarter.
John Ezekiel E. Roberts
Do you think the duration of the overcapacity in polyethylene, siloxanes and polyurethanes are all in sync? Or do you see one or another of these chains actually improving before the others?
James R. Fitterling
That’s a good question, John. I think isocyanate is in relatively decent shape within the polyurethane portfolio PO will take longer. We’ve got probably the biggest adjustment in PO coming end of the year with a reduction of a train here in the U.S. Gulf Coast.
the demand that’s out there and the size of the market will recover quicker.
July 23, 2025
More Review for ADNOC & Covestro Deal
EU antitrust regulators resume foreign aid probe into ADNOC’s Covestro deal
By Reuters
July 3, 20251:24 PM EDTUpdated July 3, 2025
- Companies
Covestro AGBRUSSELS, July 3 (Reuters) – EU antitrust regulators have resumed scrutiny of Abu Dhabi state oil giant ADNOC’s 14.7-billion euro ($17.3 billion) acquisition of German chemicals company Covestro (1COVG.DE)
,after the companies provided the information they requested, according to an update on the European Commission website.
The EU competition enforcer, which had temporarily halted its review on May 28, set a new deadline of July 28 for its decision.
The EU’s Foreign Subsidies Regulation takes aim at unfair foreign aid for companies which may have to provide concessions to offset the state support in return for clearance of their deals.
ADNOC had in May secured EU approval for the acquisition under EU merger rules.
($1 = 0.8511 euros)
July 16, 2025
Covestro FM in Europe
Covestro Declares Force Majeure at Dormagen Site Following Transformer Fire
PUdaily | Updated: July 16, 2025
Following an electrical fire at an external transformer station on 12 July, Covestro has declared force majeure on its production of caustic soda, chlorine, and hydrochloric acid (HCl) at its Dormagen site in Germany. The plant has an annual capacity of 448,000 tonnes for caustic soda and 480,000 tonnes for chlorine. Covestro noted in a customer statement that the disruption cannot be fully offset by supply from other sites, and significant delays and interruptions should be expected. The duration of the force majeure remains uncertain. PUdaily will continue to monitor the situation and provide timely updates.
This also impacts downstream TDI for now.
July 14, 2025
Characters of the Industry
Marshall Cogan
From Wikipedia, the free encyclopedia
| Marshall S. Cogan | |
|---|---|
| Born | 1937 (age 87–88) |
| Nationality | American |
| Education | Harvard Business School Harvard University Boston Latin School |
| Occupation(s) | Investment banker, Private equity investor |
| Known for | Partner of Cogan, Berlind, Weill & Levitt, Founder of United Automotive Group and Foamex International |
Marshall S. Cogan (born 1937) is an American investor and entrepreneur and former financier and trader. Cogan was the founder of United Automotive Group, which he built into one of the largest retailers of cars and trucks in the U.S. As a private equity investor, Cogan acquired a number of businesses in the 1970s and 1980s. He was also a partner of Cogan, Berlind, Weill & Levitt an investment banking and brokerage firm that would be instrumental in the consolidation of the financial services industry in the 1970s.
Early life and education
Born to a Jewish family,[1] Cogan graduated from Harvard College in 1959 and received his MBA from Harvard Business School. Cogan is also an alumnus and benefactor of the Boston Latin School having graduated in 1955.[2]
Career
Early career
Cogan started his career at CBS and worked at the investment firm, Orvis & Co., before joining the investment banking and brokerage firm of Carter, Berlind & Weill as an auto sector research analyst in 1964. Cogan was soon a partner in the firm and his name replaced the departing Arthur L. Carter in 1968 as the firm was renamed Cogan, Berlind, Weill & Levitt. Among Cogan’s partners at CBWL were Sandy Weill, later chairman and CEO of Citigroup, Arthur Levitt, later the head of the Securities and Exchange Commission and Roger Berlind a noted Broadway producer and long-time member of the board of Lehman Brothers.
In August 1973, Marshall Cogan left the firm after disputes with his fellow partners to focus on leveraged buyouts. Cogan’s first deal was the takeover of General Felt Industries (GFI) in 1974 which he completed with fellow investment banker Stephen Swid. Cogan would then merge GFI with Knoll International and use Knoll as a holding company to acquire a series of businesses.[3] Among Cogan’s most notable acquisitions were takeover of the Sheller-Globe Corporation and later the purchase of the 21 Club.[4] Cogan was unsuccessful in his high profile bids to acquire the Boston Red Sox, Sotheby’s[5][6] and L.F. Rothschild in the buyout boom of the 1980s.[3][7][8]
Foamex and United Auto
Cogan began building what would become Foamex International in the mid-1980s after the departure of his long-time partner Stephen Swid. Swid would go on to acquire the music publishing division of CBS Records, later known as SBK Records. Meanwhile, Cogan bought Foamex Products, a division of Firestone Tire & Rubber.[9] Over the next few years, Cogan continued to acquire businesses to merge with Foamex, acquiring three regional producers in 1988.[9] Cogan merged General Felt into Foamex and acquired Great Western Foam Co., a major foam producer on the West Coast.[9] In 1993, Cogan created Foamex International bringing together his various businesses and took the company public in December 1993. During the mid-1990s, Foamex grew to become the largest manufacturer and marketer of flexible polyurethane foam and foam products in North America.[9]
In 1990, Cogan founded United Automotive Group, today known as Penske Automotive Group.[10] Under Cogan, United Auto was a leading acquirer, consolidator and operator of automobile and truck dealership franchises. Cogan merged his company with Roger Penske‘s business in May 1999 after Cogan ran into financial difficulties and the company name was changed from United Automotive to Penske Automotive in 2007.[11]
Bankruptcy of Trace International
In July 1999, Cogan’s holding company, Trace International Holdings filed for bankruptcy protection. Cogan had used Trace International to hold his controlling interests in two publicly listed companies, Foamex International and United Automotive Group. Trace had pledged its stock in the two companies as collateral for certain loans.[12] After declines in the value of Foamex and United Auto Group in 1998 and 1999, Trace became insolvent as the value of its assets fell below the debt it owed. In 2003, Cogan and several directors of Trace would be accused of having drained cash from Trace International. Cogan was found by second circuit court of Delaware not guilty of all charges on June 25, 2005.[13][14][15]
Trace was a holding company through which Mr. Cogan held his principal investment assets. It was owned 70% by Mr. Cogan and 30% by three investors who were friends of Mr. Cogan. In 1999, Trace ran into serious financial difficulties because a major bank withdrew a $1 billion commitment to finance a restructuring of Trace and its holdings due to events, which had nothing to do with Trace or Mr. Cogan that led to a serious disruption in US financing markets. These financial difficulties caused Trace to file in 1999 for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. At that time, Trace’s principal assets were shares of Foamex International and United Auto Group, both of which were publicly traded U.S. corporations, and shares of CHF Industries. Eventually, a Trustee was appointed for Trace, and he sued Mr. Cogan and the other former directors of Trace. His theory was that Mr. Cogan had treated Trace as a personal holding company (which it was), and had improperly taken money out of Trace in the form of unduly high salary, salaries to his wife and payments to his daughter, loans to Mr. Cogan, his wife and others that had not been repaid and other expenditures for what the Trustee characterized as primarily personal purposes. Significantly, the other shareholders of Trace did not complain. However, the Trustee said that Trace had been in “the zone of insolvency,” (which Mr. Cogan and the other directors vehemently disputed) and that because of that Mr. Cogan and the Trace Board had owed fiduciary duties to Trace’s creditors. In 2003, the U.S. District Court for the Southern District of New York, in a very lengthy opinion, agreed with most of the Trustee’s contentions. For example, it found that Mr. Cogan had received salary over a six-year period totaling $39.6 million, which it said was $6.9 million more than executives with similar responsibilities would have received at other companies. The court also rejected claims by Mr. Cogan that he was entitled to substantial offsets against his obligation to repay the loans he had received from Trace. In 2005, the decision of the District Court was reversed on appeal on the basis that the judge had improperly failed to submit the case to a jury. However, by then, Mr. Cogan had settled the case as to himself. Putting aside the correctness of the factual determinations made by the District Court, including the hotly disputed question of when Trace had entered the zone of insolvency, in 2007, the Supreme Court of Delaware, the laws of which governed the obligations of the directors of Trace, ruled that the fact that a company may be near insolvency (i.e., in a “zone of insolvency”) does not cause the directors of a Delaware corporation to have obligations to creditors. Therefore, the basic legal premise on which the court found Mr. Cogan and others to be liable to Trace or its trustee (other than with regard to borrowed money, for which Mr. Cogan clearly was liable to Trace) turned out not to exist.
In 2006, Cogan was named to the board of Ener1, a company that manufactures lithium-ion batteries for plug-in hybrid vehicles.
Other affiliations
Cogan has also served as Chairman and Director of Color Tile, Inc., Knoll International and Sheller-Globe Corporation.
June 24, 2025
NCFI Groundbreaking Video in Mt. Airy
NCFI officially breaking ground for new plant
With the efforts of Surry County, the SCEDP, the City of Mount Airy and the employees of NCFI celebrate a new beginning for NCFI by bringing special guests and speakers to break ground for a new NCFI Polyurethanes plant at Westwood Industrial Park. We celebrate with guest speakers who share their insights into this joyous moment.
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