Urethane Blog
Dow Earnings Call Urethane Highlights
July 23, 2026
Dow Inc. (DOW) Q2 2026 Earnings Call Transcript
Jul 23, 2026, 3:20 PM ETDow Inc. (DOW) Stock
Q2: 2026-07-23 Earnings Summary
EPS of $1.44 beats by $0.16
| Revenue of $12.09B (19.68% Y/Y) beats by $65.20M
Dow Inc. (DOW) Q2 2026 Earnings Call July 23, 2026 8:00 AM EDT
Company Participants
Andrew Riker – Vice President of Investor Relations
Karen Carter – CEO & Director
Jeffrey Tate – Chief Financial Officer
Karen Carter
CEO & Director
Good morning, and thank you for joining us. As I assumed the role of CEO this month, I couldn’t help but reflect on the many fundamentals that have made Dow successful throughout our nearly 130-year history, many of which are still true today. We have a strong portfolio, a world-scale global asset base, deep customer relationships and exceptional talent. So before reviewing our near-term performance and outlook, I want to reiterate how we are using these strengths to continue building a more competitive company that consistently delivers long-term value. We have laid out our top priorities on Slide 3.
We will stay focused on the areas we can control while acting decisively in response to those we cannot. This means we will set our sights on these key priorities, holding ourselves accountable to deliver on our commitments and ensuring we are consistently grounded in creating value. First, we will drive focused growth and innovation in the high-value markets where Dow can win and create differentiated value with our customers. We will prioritize targeted innovation, technology and commercial excellence to strengthen our competitive position, deepen customer relationships and accelerate growth where we have the greatest opportunity to lead. Second, we’re enhancing our portfolio competitiveness.
This means operating with the best owner mindset across our portfolio, investing in leading businesses, technologies and low-cost positions while also taking action where we are no longer competitive. And third, we will continue to hold ourselves accountable for taking a balanced approach to capital allocation. This includes using consistent principles to strengthen our balance sheet, driving a focus on cash flow and ensuring maximum financial flexibility. Jeff and I will share additional details later on today’s call and in the coming months on each of these priorities.
But first, let’s turn to Slide 4. We delivered solid results in the second quarter. This reflects our industry leadership as we translated improved market fundamentals and disciplined execution into meaningful earnings growth, margin expansion and cash generation. Net sales were $12.1 billion, reflecting a 20% increase versus the year ago period and operating EBITDA was $2.3 billion. We demonstrated meaningful progress toward ensuring lasting competitiveness, delivering more than $300 million of benefits in the quarter through our targeted self-help actions. This includes, first and foremost, the completion of our $1 billion 2025 cost savings program.
Additionally, transform to outperform is beginning to deliver meaningful impact, and we shut down our upstream siloxanes unit in Barry, United Kingdom. We also announced new product and innovation capabilities across our silicones franchise. This allows us to capitalize on higher-value downstream opportunities and grow in attractive end markets like consumer and mobility applications where Dow is providing a wide range of enhanced solutions. The key takeaway is this. Team Dow is executing with discipline. We are doing so in an uncertain environment and taking bold actions within our control to deliver lasting competitiveness for Dow and improve value creation. We advanced meaningful self-help actions, and we have a clear path to creating long-term value with greater earnings durability and stronger cash flow through the cycle.
Jeffrey Tate
Chief Financial Officer
Thank you, and good morning to everyone joining today. As Karen mentioned, and before I get into segment results, Dow’s second quarter earnings reflect pricing leadership, better integrated margins, improved cash flow and the benefit of our self-help initiatives. This all showed up in the bottom line. And as a result, we adjusted our expected performance-based compensation compared to recent years. Now turning to our Packaging & Specialty Plastics segment on Slide 5. Net sales were $6.4 billion, up 27% versus the year ago period.
Operating EBIT was approximately $1.3 billion, reflecting an increase over the same period last year. This was primarily driven by higher polyethylene pricing, which lifted local price by more than 40%. Benefits from these higher prices in the Packaging & Specialty Plastics business were seen broadly across all regions and all applications. This more than offset lower polyethylene volumes, which declined in Europe, the Middle East, Africa and India as well as Asia Pacific, while growing in the resilient Americas. The Hydrocarbons and Energy business reported higher net sales, driven by increased olefins pricing, which more than offset lower volumes from planned maintenance on the U.S. Gulf Coast.
Importantly, while operating rates in the Hydrocarbons and Energy business declined to 84% because of planned maintenance activity, we also successfully restarted our lowest cost, most flexible European cracker in Terneuzen to match market conditions and optimize margins. Turning to Industrial Intermediates & Infrastructure on Slide 6. The segment delivered a strong year-over-year improvement in the second quarter. Net sales were up 14% versus the year ago period, driven by a 15% increase in local price. This reflects gains across both businesses in all regions.
Operating EBIT improved to $246 million, up from the same quarter last year, supported by higher margins, our self-help initiatives and lower planned maintenance activity. Polyurethanes & Construction Chemicals benefited from local price gains. And our Industrial Solutions business delivered improved sales, continuing to benefit from the start-up of our [ alkoxylation ] growth investments, which serve attractive end markets such as home care, pharma and energy. We also generated incremental earnings this quarter from the sale of noncore land in Taiwan, where we had previously shut down production. This action aligns directly to our efforts to actively optimize our portfolio with the best owner mindset.
John McNulty
BMO Capital Markets Equity Research
Just wanted to unpack II&I a bit more because it certainly seemed like you had a really chunky jump. And I understand some of it is on the asset sale, but it does seem still a bit stronger than what we were expecting. So I guess, can you help us to think about what drove some of the strength there and the sustainability of that? And then also, I mean, I think you spoke to some of the data center growth and opportunities. I guess, can you help us scale that in terms of how big that is now, the type of growth that you’re seeing and how we should be thinking about that going forward?
Karen Carter
CEO & Director
Sure. So on II&I, the jump in second quarter was driven primarily by higher margins, and that was resulting from some supply disruptions that we saw in the Americas impacting our peers. So MDI and PO specifically. You asked about the durability. The fundamentals and particularly in building and construction are still pretty weak overall. And so I would say that as we expect, particularly going into the third quarter, and this is part of our 3Q guide that those supply disruptions will start to dissipate. So you’ll start to see normalization on those margins. But to your point around data centers, I mean, this is a great new story for our DIS business, which, of course, is part of I&I. And they also helped to deliver that sequential jump in earnings. I mean we are seeing higher integrated margins across all product lines in DIS.
Data centers remains a really strong source of growth for our thermal cooling solutions in particular. We’re also seeing growth in home care solutions, so think cleaning, laundry detergent. Of course, we announced growth investments last year in our alkoxylation capacity. that’s directly impacting that. We’re also seeing growth in pegs and surfactants, which also impact cleaning and laundry detergent applications. The other thing I’d say about data centers is not just the products that we’re selling into it, but one of the things that we launched in the second quarter is something called our Dow Coolant Care Network that’s servicing data centers in terms of their thermal management needs. These data centers are pretty hot. So managing the heat is one of the critical issues that they have. And so we’re pretty excited about what this new integrated service model is going to bring to us in terms of additional margins, but also additional revenue.
Abigail Eberts
Wells Fargo Securities, LLC, Research Division
One more on MDI. I think you kind of covered it in the last comment. But are you facing any issues with carbon monoxide or chlorine supply? And then also with oil prices coming back up, do you expect to give back some of that margin benefit you saw from lower benzene prices this quarter?
Karen Carter
CEO & Director
So thanks for the question. No, we’re not having any issues on your first question. Again, things continue to be quite volatile. We are seeing benzene, of course, that’s related to oil, that’s starting to come back up. And so you could see some margin come back in into third quarter that we do not have baked into our third quarter guide. And as I indicated before, we’re going to focus on maximizing the quarter just as we did in second quarter. And if things materialize greatly differently than the [ 1.7 ], then we’ll come back to you with more information.
Joshua Spector
UBS Investment Bank, Research Division
I wanted to do another follow-up on the II&I side of things. Just when you were talking about the delta versus expectations, you were talking a lot about volumes and some of the success you had there, but your reported II&I volumes are down about a couple of percent year-on-year. So I mean, it looks like more of the benefit was spread related. And I guess within the quarter, or maybe a couple of hundred million better.
About half of that seems like that’s kind of onetime with the land sale and the other half, like are you assuming that you hold on to more of that? Is there something structural you would talk about that’s helped II&I from the spread side here that we should be maintaining? Or is this more just a reflection that the markets still are tighter? What is your view there?
Karen Carter
CEO & Director
So thanks for the question. On the volume side, it’s really Sadara. That’s the gap that you’re seeing that asset continues to be down. And so that’s negatively impacting our volumes in the II&I segment, particularly on polyurethanes. But as we look at the third quarter guide, we are assuming lower margins overall, really driven by typical lower seasonal demand, but then also downward pressure — pricing pressure in Europe. To the point that, again, we’re in a really volatile environment. So we could see some of that margin come back in, in Europe, which would give us some upside to that $1.7 billion.
And then you mentioned the land sale that’s also serving as a sequential tailwind and a headwind in third quarter. So let’s see what happens. Again, we’re also seeing some normalization on the MDI and PO that we said was impacting peers before, but we do have a bit of a tailwind baked into the $1.7 billion guide on that. If it takes the peers longer to get backup, then that too could be a positive for us versus the guide.
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