Dow Chemical Company’s (DOW) wholly owed subsidiary Dow AgroSciences, introduced genetically modified corn strain called POWERCORE in Brazil. POWERCORE is the first of its kind in Brazil and will prevent pests in corn.
POWERCORE contains five genes stacked in corn for increasing its productivity. It will boost corn yield between 5% and 10% depending on the technological capabilities and weather conditions. The biggest advantage that the Brazilians will get by applying POWERCORE is that the refuge area will be reduced to 5% from 10%.
DOW is a Michigan-based chemical company, whose products are used across a broad spectrum of industries. In the first quarter of 2012, the company posted earnings of 61 cents a share (excluding specific one-time items), surpassing the Zacks Consensus Estimate of 59 cents. However, it was below the year-ago adjusted earnings of 82 cents.
Revenues dropped marginally year over year to $14,719 million, lagging behind the Zacks Consensus Estimate of $15,342 billion. Double-digit growth across agricultural and feedstock/energy businesses were masked by declines in performance materials and performance plastics franchises.
The Agricultural Sciences division posted sales of $1.8 billion in the quarter, up 14% from the year-ago period. Sales volume increased 12% and price rose 2 % for the division.
Though Dow did not provide any specific financial guidance, it believes economic recovery will gain momentum in the second quarter and the remainder of the year. The company expects to meet its short- and long-term targets irrespective of economic conditions. Moreover, Dow sees an improving U.S. economy citing tailwind from the nation’s rich access to low-cost natural gas. Further, it benefits from strong fundamentals in agriculture and food markets.
However, weaknesses in the electronics and construction end-markets may sustain into the second quarter. Moreover, the company will continue facing challenges in Western Europe due to weak demand and the sovereign debt crisis.
Dow faces stiff competition from EI DuPont de Nemours & Co. (DD). Currently, the stock retains a Zacks #3 Rank, indicating a short-term “Hold” rating and we have a long-term “Neutral” recommendation on the shares of the company.
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