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Dow's (DOW) Earnings and Revenues Surpass Estimates in Q3
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Dow Inc. (DOW - Free Report) recorded a profit (on a reported basis) of $739 million or $1.02 per share in third-quarter 2022, down from a profit of $1,683 million or $2.23 per share a year ago.
Barring one-time items, adjusted earnings were $1.11 per share for the reported quarter, down from $2.75 a year ago. The figure topped the Zacks Consensus Estimate of $1.03.
Dow recorded net sales of $14,115 million for the quarter, down roughly 5% year over year. It beat the Zacks Consensus Estimate of $13,202.3 million. Sales fell as higher local pricing was more than offset by lower volumes and unfavorable currency translation. Lower sales across Packaging & Specialty Plastics and Industrial Intermediates & Infrastructure segments more than offset gains in the Performance Materials & Coatings unit.
The company saw a 3% year-over-year increase in local prices in the reported quarter. Prices, however, fell 6% on a sequential comparison basis. Volumes were down 4% year over year. Higher volumes in the United States & Canada and Asia Pacific were more than offset by a decline in Europe, the Middle East, Africa and India ("EMEAI").
Dow faced headwinds from energy and feedstock cost inflation, lower demand in EMEAI and supply chain and logistics constraints in the reported quarter.
Packaging & Specialty Plastics: The division’s sales fell 5% year over year to $7.3 billion in the reported quarter. Volumes were flat year-over-year while local prices fell 2% as gains in functional polymers were more than offset by reduced polyethylene prices. Currency reduced sales by 3%.
Industrial Intermediates & Infrastructure: Sales for the unit went down 9% year over year to $4.1 billion. Local prices rose 5% with gains in all businesses. Volumes fell 9% as declines in Polyurethanes & Construction Chemicals were partly masked by higher volumes in Industrial Solutions. Currency reduced sales by 5%.
Performance Materials & Coatings: Revenues from the division rose 5% year over year to $2.7 billion. Volumes fell 5% while local price went up 15%. Volumes were impacted by declines in building and construction. Currency reduced sales by 5%.
Financials
Dow had cash and cash equivalents of $2,216 million at the end of the quarter, down around 24% year over year. Long-term debt was $12,921 million, down around 8% year over year.
Cash provided by operating activities from continuing operations was $1.9 billion in the reported quarter while free cash flow was $1.5 billion.
Dow also returned $1.3 billion to shareholders in the quarter through dividends and share buybacks.
Outlook
Dow sees the macroeconomic environment to remain dynamic over the near term. It continues to leverage its global scale, geographic diversity, and advantaged feedstock and derivative flexibility. The company has also outlined plans that have the potential to deliver more than $1 billion in cost savings next year.
The company also remains committed on advancing its decarbonize and grow strategy with higher-return investments. Its strong financial position and balance sheet and sustained focus on cash flow generation provide it adequate flexibility to execute its capital allocation priorities, Dow noted.
Price Performance
Dow’s shares have lost 24.7% over a year compared with a 15% decline recorded by the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Dow currently carries a Zacks Rank #5 (Strong Sell).
Better-ranked stocks worth considering in the basic materials space include Albemarle Corporation (ALB - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) and Ryerson Holding Corporation (RYI - Free Report) .
Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 426.7% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 5% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 10% in a year.
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 2.1% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 69% in a year. The company currently carries a Zacks Rank #1.
Ryerson Holding, currently carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of 74.2% for the current year. The consensus estimate for RYI's earnings for the current year has been revised 3.2% upward in the past 60 days.
Ryerson Holding’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 28.9%. RYI has gained around 23% over a year.
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Dow's (DOW) Earnings and Revenues Surpass Estimates in Q3
Dow Inc. (DOW - Free Report) recorded a profit (on a reported basis) of $739 million or $1.02 per share in third-quarter 2022, down from a profit of $1,683 million or $2.23 per share a year ago.
Barring one-time items, adjusted earnings were $1.11 per share for the reported quarter, down from $2.75 a year ago. The figure topped the Zacks Consensus Estimate of $1.03.
Dow recorded net sales of $14,115 million for the quarter, down roughly 5% year over year. It beat the Zacks Consensus Estimate of $13,202.3 million. Sales fell as higher local pricing was more than offset by lower volumes and unfavorable currency translation. Lower sales across Packaging & Specialty Plastics and Industrial Intermediates & Infrastructure segments more than offset gains in the Performance Materials & Coatings unit.
The company saw a 3% year-over-year increase in local prices in the reported quarter. Prices, however, fell 6% on a sequential comparison basis. Volumes were down 4% year over year. Higher volumes in the United States & Canada and Asia Pacific were more than offset by a decline in Europe, the Middle East, Africa and India ("EMEAI").
Dow faced headwinds from energy and feedstock cost inflation, lower demand in EMEAI and supply chain and logistics constraints in the reported quarter.
Dow Inc. Price, Consensus and EPS Surprise
Dow Inc. price-consensus-eps-surprise-chart | Dow Inc. Quote
Segment Highlights
Packaging & Specialty Plastics: The division’s sales fell 5% year over year to $7.3 billion in the reported quarter. Volumes were flat year-over-year while local prices fell 2% as gains in functional polymers were more than offset by reduced polyethylene prices. Currency reduced sales by 3%.
Industrial Intermediates & Infrastructure: Sales for the unit went down 9% year over year to $4.1 billion. Local prices rose 5% with gains in all businesses. Volumes fell 9% as declines in Polyurethanes & Construction Chemicals were partly masked by higher volumes in Industrial Solutions. Currency reduced sales by 5%.
Performance Materials & Coatings: Revenues from the division rose 5% year over year to $2.7 billion. Volumes fell 5% while local price went up 15%. Volumes were impacted by declines in building and construction. Currency reduced sales by 5%.
Financials
Dow had cash and cash equivalents of $2,216 million at the end of the quarter, down around 24% year over year. Long-term debt was $12,921 million, down around 8% year over year.
Cash provided by operating activities from continuing operations was $1.9 billion in the reported quarter while free cash flow was $1.5 billion.
Dow also returned $1.3 billion to shareholders in the quarter through dividends and share buybacks.
Outlook
Dow sees the macroeconomic environment to remain dynamic over the near term. It continues to leverage its global scale, geographic diversity, and advantaged feedstock and derivative flexibility. The company has also outlined plans that have the potential to deliver more than $1 billion in cost savings next year.
The company also remains committed on advancing its decarbonize and grow strategy with higher-return investments. Its strong financial position and balance sheet and sustained focus on cash flow generation provide it adequate flexibility to execute its capital allocation priorities, Dow noted.
Price Performance
Dow’s shares have lost 24.7% over a year compared with a 15% decline recorded by the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Dow currently carries a Zacks Rank #5 (Strong Sell).
Better-ranked stocks worth considering in the basic materials space include Albemarle Corporation (ALB - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) and Ryerson Holding Corporation (RYI - Free Report) .
Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 426.7% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 5% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 10% in a year.
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 2.1% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 69% in a year. The company currently carries a Zacks Rank #1.
Ryerson Holding, currently carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of 74.2% for the current year. The consensus estimate for RYI's earnings for the current year has been revised 3.2% upward in the past 60 days.
Ryerson Holding’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 28.9%. RYI has gained around 23% over a year.