Dow Chemical DOW is the biggest U.S. chemical maker by sales, offering a vast range of chemical, plastic and agricultural products and services. As the company’s products are used in almost every industry, its results put a spotlight on end market scenario and demand trends for chemical products across a bevy of industries.
Dow is leveraging its North American feedstock advantage and is investing billions of dollars for setting up crackers that produces ethylene from ethane. The company is also aggressively pursuing its productivity and growth actions as well as its cost-reduction initiatives.
However, Dow is seeing weakness in the energy market, stemming from lower oil prices. Weak commodity prices also remain a headwind for the company's agriculture business. It is also exposed to currency headwinds.
Let’s have a quick look at this chemical behemoth’s third-quarter release.
Estimate Trend & Surprise History
Investors should note that the earnings estimate for Dow for the third quarter has been stationary over the past week and month. Dow has beaten the Zacks Consensus Estimate in the trailing 4 quarters with an average beat of 13.13%. Investors have been eagerly awaiting Dow’s latest earnings report to see whether it continues the winning streak.
Earnings
Dow logged adjusted earnings of 82 cents per share that outstripped the Zacks Consensus Estimate of 68 cents. Earnings were supported by higher margins in the company’s plastics business and lower raw material costs.
Revenues
Dow raked in net sales of $12,036 million, down 16% year over year, hurt by unfavorable currency and pricing impact. That missed the Zacks Consensus Estimate of $12,252 million.
Key Stats/Developments to Note
Dow is seeing growth across China, the U.S. and Europe in the upcoming quarters amid a challenging environment in other markets including Brazil. The company also expects higher demand to eventually drive oil prices, thereby boosting its margins. Dow will remain committed to its aggressive portfolio management and productivity initiatives.
Zacks Rank
Dow currently has a Zacks Rank #4 (Sell), but that could change following its earnings report which was just released.
Market Reaction
Dow’s shares jumped 8.5% in pre-market trading. It would be interesting to see how the market reacts to the results during the trading session today.
Check back later for our full write up on Dow’s earnings report!
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment