The Dow Chemical Company (DOW) recently announced to redeem notes through a call option. The notes amounting to $6.775 million carry a coupon rate of 3.9% and are due on June 15, 2015. The amount redeemed will be 100% of the remaining amount. The date of settlement is on June 15, 2011.
Recently, Dow reported its first-quarter 2011 earnings results. The company earned $0.82 per share in the first quarter of 2011, ahead of the Zacks Consensus Estimate of $0.67 as well as last year’s $0.43. However, including one-time charges, the company earned $0.54 per share compared with $0.41 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 and pricing gains across all business segments and geographical regions, particularly North America and Europe yielded healthy revenue growth.
The company’s financial position was also sound with cash and cash equivalents of $3.56 billion as of March 31, 2011. However, DOW had a huge debt of $19.08 billion as of March 31, 2011 after retiring $2.5 billion of debt in the reported quarter. This added to the shareholders value as it reduced the interest expenses by approximately $200 million.
Dow anticipates that demand would improve further, especially in Asia, with the global economic recovery. The US and European markets have also started showing signs of improvement. Dow is also optimistic on major consumer-markets, including electronics, coatings, automotive and packaging. However, construction markets are expected to remain weak.
DOW faces stiff competition from EI DuPont de Nemours & Co. (DD). Currently, Dow has a short-term (1 to 3 months) Zacks #1 Rank (Strong Buy) but a long- term Neutral recommendation.
DU PONT (EI) DE (DD): Free Stock Analysis Report
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