Dow Profits Fall On Cost Of Sales, Administrative Expense

MIDLAND — Dow Chemical Co. (NYSE: DOW) reported third quarter net income of $804 million or 63 cents a share, down from $1.37 billion or $1.09 a share, in the same quarter a year earlier. Revenue was $12.48 billion, up from $12.04 billion a year earlier.

For the nine months, net income was $4.01 billion, or $3.48 a share, up from $3.82 billion or $3.24 a share a year earlier. Revenue was $35.14 billion, down from $37.32 billion a year earlier.


Higher research and development and selling, general and administrative expenses were behind the profit decline, as wlel as higher cost of sales. Included was a pretax loss of $212 million in inventories assumed in the ownership restructuring of Dow Corning Corp., as well as a total of $163 million in restructuring charges.

Agricultural Sciences reported third quarter sales of $1.2 billion, up 6 percent versus the year-ago period. Price and volume each rose 3 percent. Earnings before interest, taxes, depreciation and amortization for the segment decreased to $101 million from $582 million in the year-ago period, which reflected the gain on the AgroFresh divestiture.

Consumer Solutions delivered third quarter sales of $1.6 billion, up from $1.1 billion in the year-ago period, reflecting the full contribution of Consumer Solutions – Silicones. EBITDA for the segment was a third quarter record of $375 million.

Infrastructure Solutions reported third quarter sales of $2.5 billion, up from $1.9 billion in the year-ago period, reflecting the addition of Infrastructure Solutions – Silicones, which more than offset lower pricing in all businesses. EBITDA for the segment was $285 million versus $325 million in the year-ago period.

Performance Materials & Chemicals reported third quarter sales of $2.4 billion, down from $3.1 billion in the year-ago period, reflecting the impact of the split-off of Dow Chlorine Products and pricing declines in all businesses. EBITDA was $322 million, down from $540 million in the same period last year, primarily driven by pricing pressures that resulted in margin compression, reduced earnings due to prior-period divestitures and the impact of lower equity earnings.

Performance Plastics reported third quarter sales of $4.70 billion, up from $4.67 billion in the year-ago period, as volume gains in all businesses more than offset price declines in all businesses. EBITDA for the segment was $1.25 billion, down from $1.35 billion in the year-ago period. Robust consumer-driven demand conditions in packaging, transportation and infrastructure market sectors was more than offset by lower margins in Europe and higher costs due to planned turnaround activity.

For more information, including a replay of a conference call discussing these results, visit http://www.dow.com.

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