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Dow (DOW) Warms Up to Q1 Earnings: What's in the Cards?
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Dow Inc. (DOW - Free Report) is scheduled to come up with first-quarter 2022 results before the opening bell on Apr 21. The company is expected to have benefited from cost-reduction initiatives, higher prices and strong demand across a number of end markets. However, raw material and energy cost inflation and plant turnaround costs are likely to have affected its performance.
The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 11.1%. It posted an earnings surprise of 5.4% in the last reported quarter.
Dow’s shares are up 1.4% over a year compared with 2.1% decline recorded by the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
Zacks Model
Our proven model predicts an earnings beat for Dow this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.
Earnings ESP: Earnings ESP for Dow is +5.45%. The Zacks Consensus Estimate for the first quarter is currently pegged at $2.02. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Dow currently carries a Zacks Rank #1.
What do the Estimates Say?
Dow expects revenues for the first quarter to be in the band of $14-$14.5 billion.
The Zacks Consensus Estimate for revenues for Dow is currently pegged at $14,420 million, suggesting a rise of 21.4% year over year.
Some Factors at Play
Dow is likely to have benefited, in the first quarter, from higher demand across a number of markets including personal care, electronics and construction, aided by the ongoing economic recovery. Demand is likely to have been supported by higher industrial activities. Higher demand across healthcare and packaging markets is also likely to have supported its results. The pandemic has led to a surge in demand for health, hygiene and safety products.
The company is also expected to have gained from cost synergy savings and productivity actions in the March quarter. It remains focused on maintaining cost and operational discipline. Benefits of its restructuring program are also likely to get reflected on the company’s bottom line in the quarter.
However, the company is expected to have witnessed challenges from higher raw material and energy costs in the first quarter. Higher feedstock costs are also likely to have hurt Asian olefin margins in the first quarter. Dow sees $200 million associated headwind in the Packaging & Specialty Plastics segment in the quarter. It also expects an unfavorable impact in the Industrial Intermediates & Infrastructure unit in the first quarter due to raw material and energy cost inflation.
The company is also likely to have faced headwinds from plant turnaround costs in the first quarter. Dow sees headwind of $50 million in its Performance Materials & Coatings segment in the first quarter associated with the turnaround at its Deer Park methacrylates facility. Turnaround costs are expected to have impacted margins in this unit in the first quarter.
Here are some companies in the basic materials space you may want to consider as our model shows these too have the right combination of elements to post an earnings beat this quarter:
The Zacks Consensus Estimate for Mosaic’s first-quarter earnings has been revised 14.6% upward over the past 60 days. The Zacks Consensus Estimate for MOS’s earnings for the quarter is currently pegged at $2.44.
Cleveland-Cliffs Inc. (CLF - Free Report) , expected to release earnings on Apr 22, has an Earnings ESP of +10.18%.
Cleveland-Cliffs carries a Zacks Rank #2. The consensus estimate for CLF’s earnings for the first quarter stands at $1.51.
Methanex Corporation (MEOH - Free Report) , scheduled to release earnings on Apr 27, has an Earnings ESP of +5.85% and carries a Zacks Rank #1.
The Zacks Consensus Estimate for Methanex's first-quarter earnings has been revised 2.5% upward over the past 60 days. The consensus estimate for MEOH’s earnings for the quarter is currently pegged at $2.05.
Image: Bigstock
Dow (DOW) Warms Up to Q1 Earnings: What's in the Cards?
Dow Inc. (DOW - Free Report) is scheduled to come up with first-quarter 2022 results before the opening bell on Apr 21. The company is expected to have benefited from cost-reduction initiatives, higher prices and strong demand across a number of end markets. However, raw material and energy cost inflation and plant turnaround costs are likely to have affected its performance.
The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 11.1%. It posted an earnings surprise of 5.4% in the last reported quarter.
Dow’s shares are up 1.4% over a year compared with 2.1% decline recorded by the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
Zacks Model
Our proven model predicts an earnings beat for Dow this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.
Earnings ESP: Earnings ESP for Dow is +5.45%. The Zacks Consensus Estimate for the first quarter is currently pegged at $2.02. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Dow currently carries a Zacks Rank #1.
What do the Estimates Say?
Dow expects revenues for the first quarter to be in the band of $14-$14.5 billion.
The Zacks Consensus Estimate for revenues for Dow is currently pegged at $14,420 million, suggesting a rise of 21.4% year over year.
Some Factors at Play
Dow is likely to have benefited, in the first quarter, from higher demand across a number of markets including personal care, electronics and construction, aided by the ongoing economic recovery. Demand is likely to have been supported by higher industrial activities. Higher demand across healthcare and packaging markets is also likely to have supported its results. The pandemic has led to a surge in demand for health, hygiene and safety products.
The company is also expected to have gained from cost synergy savings and productivity actions in the March quarter. It remains focused on maintaining cost and operational discipline. Benefits of its restructuring program are also likely to get reflected on the company’s bottom line in the quarter.
However, the company is expected to have witnessed challenges from higher raw material and energy costs in the first quarter. Higher feedstock costs are also likely to have hurt Asian olefin margins in the first quarter. Dow sees $200 million associated headwind in the Packaging & Specialty Plastics segment in the quarter. It also expects an unfavorable impact in the Industrial Intermediates & Infrastructure unit in the first quarter due to raw material and energy cost inflation.
The company is also likely to have faced headwinds from plant turnaround costs in the first quarter. Dow sees headwind of $50 million in its Performance Materials & Coatings segment in the first quarter associated with the turnaround at its Deer Park methacrylates facility. Turnaround costs are expected to have impacted margins in this unit in the first quarter.
Dow Inc. Price and EPS Surprise
Dow Inc. price-eps-surprise | Dow Inc. Quote
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows these too have the right combination of elements to post an earnings beat this quarter:
The Mosaic Company (MOS - Free Report) , scheduled to release earnings on May 2, has an Earnings ESP of +0.89% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Mosaic’s first-quarter earnings has been revised 14.6% upward over the past 60 days. The Zacks Consensus Estimate for MOS’s earnings for the quarter is currently pegged at $2.44.
Cleveland-Cliffs Inc. (CLF - Free Report) , expected to release earnings on Apr 22, has an Earnings ESP of +10.18%.
Cleveland-Cliffs carries a Zacks Rank #2. The consensus estimate for CLF’s earnings for the first quarter stands at $1.51.
Methanex Corporation (MEOH - Free Report) , scheduled to release earnings on Apr 27, has an Earnings ESP of +5.85% and carries a Zacks Rank #1.
The Zacks Consensus Estimate for Methanex's first-quarter earnings has been revised 2.5% upward over the past 60 days. The consensus estimate for MEOH’s earnings for the quarter is currently pegged at $2.05.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.