Dow grows sales through higher prices as volumes decline
Dow increased third-quarter sales by 13 per cent as local prices rose 14 per cent, while total volume declined 1 per cent. The company returned to net profit and increased cash generated by operations. Management attributed improved operating earnings to higher prices and cost measures, partly offset by increased raw material, energy and logistics costs. Packaging and specialty plastics led sales growth.
Economics & Markets··Evening
Higher prices lift quarterly sales
The chemicals and materials producer Dow, reported third-quarter net sales of 11,267 million dollars, compared with 9,973 million dollars a year earlier. The quarterly results were released on 22 October. Annual sales growth rounded to 13 per cent. Its operating earnings per share were 0.71 dollars, against an adjusted loss of 0.19 dollars previously.[1], [2]
Dow recorded a 14 per cent rise in local prices and a 1 per cent decline in total volume; currency effects remained broadly unchanged. Management identified Asia Pacific as the region most affected by the Middle East conflict. Dow said volumes grew in the other regions. It linked improved operating earnings to pricing and savings, partly offset by higher raw material, energy and logistics costs.[1]
Plastics lead growth across the businesses
Packaging and Specialty Plastics posted sales of approximately 5.8 billion dollars, an increase of 18 per cent. Its local prices rose 17 per cent and volume increased 1 per cent. The division generated operating earnings of 585 million dollars. These segment figures accompanied group operating profit before financing and tax of 887 million dollars, up by 707 million dollars.[1]
Industrial Intermediates and Infrastructure increased sales by 8 per cent even as volume declined 7 per cent. Performance Materials and Coatings reported an 8 per cent sales increase and 3 per cent volume growth. Chief executive Karen S. Carter highlighted cost reductions, changes to European assets and the company’s transformation program as contributors to its operating performance.[1]
Cash generation increases as debt falls
Continuing operations generated cash of 1,839 million dollars, an annual increase of 709 million dollars. Company-defined free cash flow was 1,133 million dollars. Dow paid quarterly dividends totaling 253 million dollars. Management said it released more than 400 million dollars from working capital during the quarter and reduced debt by approximately 600 million dollars from the year’s beginning.[1]
Net income calculated under generally accepted accounting principles was 525 million dollars, with reported earnings per share of 0.62 dollars. The operating per-share measure excluded significant items worth 0.09 dollars per share, principally connected to Dow’s self-help programs.[1]
