Dow Posts Strong Quarter
Dow Chemical profit beats as consumer-market focus pays off
Dow Chemical’s profit beat analysts’ estimates for the 12th straight quarter as the company gained from its focus on consumer markets such as automotive and electronics.
The company, in a bid to reduce its exposure to volatile commodity markets, has sold billions of dollars of assets over the years, including a $5 billion divestiture of a bulk of its chlorine business.
DuPont, which Dow is merging with, reported a higher-than-expected quarterly profit on Tuesday, helped by lower expenses and higher sales volumes.
DuPont said on Tuesday the merger, announced in December, may not be completed by the year-end as originally scheduled and would now likely close in the first quarter of 2017.
Dow’s net income attributable to shareholders slumped 44 percent to $719 million, or 63 cents per share, in the third quarter ended Sept.30, from a year earlier.
The year-ago quarter included a 32 cents per share gain from the sale of a unit that made chemicals to keep farm produce fresh.
Excluding a charge related to Dow’s deal to assume full control of Dow Corning and other items, profit in the latest quarter was 91 cents per share, higher than the average analyst estimate of 79 cents, according to Thomson Reuters I/B/E/S.
Dow’s profit was also boosted by a 6 percent rise in sales volumes, adjusted for acquisitions and divestitures.
Third-quarter operating margin expanded by 25 basis points to 20 percent on an earnings before interest, taxes, depreciation and amortization (EBITDA) basis.
Sales rose 3.7 percent to $12.48 billion, also topping analysts’ estimates of $11.96 billion.