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Dow Reports Third Quarter Results [Global Data Point](Global Data Point Via Acquire Media NewsEdge) Sales rose 5 percent versus the year-ago period, reaching $14.4 billion, driven by price increases associated with tightening demand conditions in key regions, with gains in most operating segments. Sales gains were led by Performance Plastics (up 9 percent on an adjusted basis(2)), and Performance Materials (up 8 percent). The Company reported increased sales in all geographic areas. Sales in developed geographies grew 4 percent, led by gains in North America, where sales rose 7 percent. Sales in emerging geographies increased 6 percent, due primarily to strength in Performance Plastics in Latin America. EBITDA(3) grew to $2.3 billion, up 24 percent versus the prior year, driven by ongoing productivity actions and improved market fundamentals. Performance Plastics achieved record quarterly adjusted EBITDA results (up 31 percent versus the year-ago period). Performance Materials EBITDA grew 61 percent with increases in most businesses, notably in Polyurethanes and PO/PG. Electronic and Functional Materials also delivered record quarterly EBITDA (up 11 percent). Adjusted EBITDA margin(4) expanded more than 240 basis points to 15.9 percent year over year. Dow reported an operating rate of 88 percent, up 6 percent versus the same quarter last year, driven primarily by productivity improvements in Performance Materials and Feedstocks and Energy, coupled with higher operating rates in Performance Plastics. Cash flow from operations was $1.8 billion for the quarter, and $3.7 billion year-to-date. Dow rewarded shareholders with $1.3 billion in declared dividends and $3.1 billion in share repurchases year to date Review of Third Quarter Results The Dow Chemical Company (NYSE: DOW) reported sales of $14.4 billion, up 5 percent versus the year-ago period. Gains were driven by price increases associated with tightening demand conditions in key regions, with increased sales reported in most operating segments. Sales gains were led by Performance Plastics (up 9 percent on an adjusted basis) and Performance Materials (up 8 percent). The Company reported increased sales in all geographic areas. Sales in developed geographies grew 4 percent, led by gains in North America, where sales rose 7 percent. Sales in emerging geographies increased 6 percent, due primarily to strength in Performance Plastics in Latin America. EBITDA grew to $2.3 billion, up 24 percent versus the prior year, driven by ongoing productivity actions and improved market fundamentals. Earnings for the quarter were $0.71 per share, or $0.72 per share on an adjusted basis. This compares with earnings of $0.49 per share, or adjusted earnings of $0.50 per share in the same quarter last year. Dow reported equity earnings of $229 million, down 29 percent versus the same period last year. Decreases reflect higher spending at Sadara, lower styrene prices and adverse impacts associated with the unplanned outage of an ethylene production facility in Canada. Certain Items in the current quarter included pretax charges of $12 million for nonrecurring transaction costs associated with the planned separation of a significant portion of the Company's chlorine value chain. (See Supplemental Information at the end of the release for a description of Certain Items affecting results.) Research and Development (R%7ED) expenses were down 2 percent versus the same period last year, reflecting the Company's execution against its strategy to prioritize R%7ED resources on high-return market sectors. Selling, General and Administrative (SG%7EA) expenses increased 8 percent as compared with the year-ago period, driven primarily by growth initiatives - including commercial activities in Agricultural Sciences. Cash flow from operations was $1.8 billion for the quarter, and $3.7 billion year to date. Dow rewarded shareholders with $1.3 billion in declared dividends and $3.1 billion in share repurchases year to date. Electronic and Functional Materials Electronic and Functional Materials reported third quarter sales of $1.2 billion, up 3 percent versus the same quarter last year. In Dow Electronic Materials, gains from continued strong foundry demand in Semiconductor Technologies were offset by declines in Display Technologies as a result of lower sales in films and filters and OLED materials. Functional Materials drove sales increases in nearly all geographies, led by growth in North America. Double-digit gains in Dow Microbial Control and Dow Pharma and Food Solutions reflect strong growth fundamentals in the energy, water and pharmaceuticals market sectors. Equity earnings for the segment were $35 million. This compares with $36 million in the year-ago period. The segment reported record third quarter EBITDA of $320 million, versus $287 million in the same quarter last year. Coatings and Infrastructure Solutions Coatings and Infrastructure Solutions reported third quarter sales of $1.8 billion, flat versus the year-ago period, as gains in North America and Latin America were offset by declines in other regions. Dow Coating Materials reported broad-based sales gains, led by increases in epoxy coatings. Supply limitations of vinyl acetate monomer from unplanned production outages impacted sales in Performance Monomers. In Dow Water and Process Solutions, increased demand for reverse osmosis and ion exchange technologies in North America was more than offset by declines in Asia Pacific and the Europe, Middle East and Africa (EMEA) region. Equity earnings for the segment were $54 million. This compares with $32 million in the year-ago period. The segment reported EBITDA of $289 million, up $6 million versus the same quarter last year, as equity earnings, demand growth and productivity efforts more than offset costs associated with unplanned outages. Agricultural Sciences Agricultural Sciences reported third quarter sales of $1.4 billion, flat versus the year-ago period. On a year-to-date basis, the segment reported record sales of $5.4 billion. Crop Protection sales declined 1 percent versus the same quarter last year, due to softening market conditions in North America. Year to date, sales of new crop protection products were up 18 percent, led by Isoclast™ insecticide. Seeds delivered 5 percent sales gains versus the year-ago period, representing a record third quarter, led by soybeans and sunflower growth in North America and Latin America. Equity earnings for the segment were $1 million. This compares with $3 million in the year-ago period. The segment reported EBITDA of $5 million, down from $18 million in the same quarter last year. Third quarter EBITDA margins reflect the impact of softer market conditions in a seasonally weak quarter weighing down Crop Protection results, coupled with increased spending on growth initiatives. Performance Materials Performance Materials reported third quarter sales of $3.6 billion, up 8 percent versus the year-ago period, with gains in all geographic areas. Polyurethanes achieved double-digit revenue growth with higher sales in all geographic areas driven by gains in the consumer comfort, appliance and industrial market sectors. Sales rose in Propylene Oxide/Propylene Glycol to a new quarterly record due to strong operational performance, growth in key market sectors, as well as industry supply disruptions in both North America and EMEA. Dow Oil, Gas and Mining delivered record sales due to double-digit growth on strong shale dynamics in North America and project-related demand in refining and processing. Dow Automotive Systems reported sales gains, driven by the adoption of innovative adhesive products. Equity losses for the quarter were $29 million. This compares with equity losses of $11 million in the year-ago period. The segment reported EBITDA of $506 million, an increase of $192 million or 61 percent versus the same quarter last year, as a result of improved market dynamics coupled with ongoing productivity actions. (c) 2014 GlobalData Provided by SyndiGate Media Inc. (Syndigate.info). |