The Dow Chemical Company (DOW) earned 82 cents per share in the first quarter of 2011, ahead of the Zacks Consensus Estimate of 67 cents per share as well as last year’s 43 cents per share. However, including one-time charges, the company earned 54 cents per share compared with 41 cents per share in the year-ago quarter.
Quarterly revenues jumped 20% year over year to $14.7 billion and were above the Zacks Consensus Estimate of $13.8 billion. Volume (8%) and pricing (12%) gains across all business segments and geographical regions, particularly North America and Europe, yielded healthy revenue growth.
North American revenues grew 8.1% while that of Latin America shot up 13.7%. Demand increased by 12.9% in Europe, Middle East and Africa, and 4.9% in Asia Pacific. Latin American volumes were up 1%. Volume in Asia Pacific decreased 4% and in North America decreased 2%.
A stronger top-line growth resulted in an increase of over 34% in EBITDA (adjusted) to $2.4 billion. EBITDA margin was up 300 basis points year over year. Dow’s global operating rate was 83%, flat year over year but up 2% sequentially.
Segment Review
Electronic and Specialty Materials: Sales in the segment climbed 14% year over year to $1.3 billion, driven by 11% volume growth and price gains of 3%. The Electronic business reported double-digit volume growth, with increases across all business units.
Dow’s Display Technologies and Growth Technologies businesses reported strongest demand gains, driven by wins from new product introductions. In Asia Pacific, Electronic Materials reported volume growth across all business units, resulting from strong global demand for consumer electronics and high foundry utilization rates.
The business recorded several customer wins in the period, including photoresist for leading edge memory production, films for consumer electronics and electroplating materials for mobile phone applications.
Sales in the Specialty Material business were facilitated by double-digit growth in volumes, especially in Asia-Pacific and Latin America. EBITDA was $344 million versus last year’s $368 million.
Coatings and Infrastructure: Sales of $1.4 billion grew 16% year over year. Volume rose 3% year over year and price was up 13%. The coatings business benefited from higher sales of architectural and industrial coatings.
The infrastructure business also recorded a double-digit sales improvement, driven by volume gains despite continued weakness in residential and commercial construction end markets. EBITDA of $188 million was higher than $143 million in the same period last year.
Health and Agricultural Sciences: This segment’s sales moved up 17% to $1.6 billion in the first quarter, with volume gains of 14% and price increase of 3%.
Seeds, Traits and Oils posted more than 25% sales gains driven by growth in corn and cotton. The continued ramp-up of SmartStax
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