Dow Chemical Profit Tops Expectations, Even as Revenue Slides 20%
February 02 2016 - 8:09AM
Dow Jones News
By Lisa Beilfuss
Dow Chemical, in the midst of trying to merge with DuPont Co.,
said profit rose in its latest quarter, thanks to a gain stemming
from the sale of a chunk of its chlorine business.
Revenue, meanwhile, slid 20% due mostly to price declines and
adverse foreign-exchange rates. Results topped expectations and
sent shares up 3.3% in premarket trading.
Midland, Mich.-based Dow, a giant in the chemical and
agriculture industries and maker of products ranging from corn
seeds to plastic, in December struck a deal to combine with rival
DuPont into a $120 billion company that will have about $90 billion
in sales. The merged firm, if the deal is approved, expects to cut
some $3 billion in costs before splitting into three separate
businesses 18 to 24 months after the merger closes.
In the fourth quarter, Dow separately completed its roughly $5
billion divestiture of Dow Chlorine Products.
Dow's deal with DuPont came as industrial companies struggle
amid sinking commodity prices and a strengthening U.S. dollar. For
the fourth-quarter sales decline, Dow pointed to local price
declines in hydrocarbons and energy, in addition to the stronger
dollar that makes its products more expensive abroad.
The sales decline was offset by a large gain on the sale of the
chlorine business in addition to reduced overhead costs and lower
research and development spending.
For the quarter, Dow reported a profit of $3.61 billion, or
$2.94 a share, up from $819 million, or 63 cents, a year earlier.
Per-share results reflect the payout of preferred dividends.
Excluding a gain of $1.96 a share resulting from the
aforementioned divestiture, among other items, per-share earnings
rose to 93 from 85 cents.
Revenue declined 20% to $11.46 billion. Analysts projected 70
cents in adjusted earnings per share on $11.2 billion in revenue,
according to Thomson Reuters.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
February 02, 2016 07:54 ET (12:54 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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