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The company surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missed once. DOW delivered a trailing four-quarter earnings surprise of 13.3% on average. It posted an earnings surprise of 56.8% in the last reported quarter.
The company is expected to have benefited, in the second quarter, from its cost and productivity initiatives. However, soft demand due to weak global economic activities and plant turnaround costs are likely to have affected its performance.
Dow’s shares are up 4.3% over a year compared with 12.7% rise recorded by the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
The Zacks Consensus Estimate for revenues for Dow for the second quarter is currently pegged at $11,875 million, suggesting a decline of around 24.2% year over year.
Some Factors at Play
Dow is expected to have gained from cost-saving and productivity actions in the second quarter. It remains focused on maintaining cost and operational discipline. DOW is implementing targeted actions focused on optimizing labor and purchased service costs. Benefits of its restructuring program are also likely to get reflected on the company’s bottom line in the June quarter.
However, the company is expected to have faced headwinds from weaker demand in Europe and Asia. Lower consumer spending amid inflationary pressures is likely to have impacted demand in Europe. In the Performance Materials & Coatings segment, the company is seeing weaker demand in consumer electronics and industrial end markets. Softness across these markets is likely to have hurt volumes and sales in Performance Materials & Coatings in the second quarter of 2023. Our estimate for revenues for the Performance Materials & Coatings unit is pinned at $2,342.1 million, suggesting a decrease of around 22% year over year.
Inflationary pressures are also impacting consumer durables and building and construction demand in Europe. This is likely to have affected the Industrial Intermediates & Infrastructure segment in the quarter to be reported. Our estimate for revenues for the Industrial Intermediates & Infrastructure segment is pegged at $3,397.6 million, indicating a roughly 22.3% year-over-year decline.
In Packaging & Specialty Plastics, weaker consumer demand in Europe is likely to continue to have impacted volumes and sales in this unit. Our estimate for revenues for the Packaging & Specialty Plastics segment is currently pegged at $6,142.6 million, calling for a decline of around 25.4% year over year.
The company is also likely to have faced headwinds from plant turnaround costs in the second quarter. Increased planned maintenance activities are expected to have affected the Packaging & Specialty Plastics segment in the quarter. Dow expects an associated headwind of roughly $25 million in the second quarter. The Industrial Intermediates & Infrastructure unit is also expected to have witnessed headwinds in the quarter related to a turnaround at DOW’s Louisiana glycols facility. Costs associated with turnarounds are likely to have impacted Dow's margins.
Our proven model does not conclusively predict an earnings beat for Dow this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Dow is +0.66%. The Zacks Consensus Estimate for earnings for the second quarter is currently pegged at 70 cents. 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 #5 (Strong Sell).
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Agnico Eagle Mines Limited (AEM - Free Report) , which is scheduled to release earnings on Jul 26, has an Earnings ESP of +3.84% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for AEM’s earnings for the second quarter is currently pegged at 54 cents.
Axalta Coating Systems Ltd. (AXTA - Free Report) , which is slated to release its earnings on Aug 1, has an Earnings ESP of +6.02%.
The consensus estimate for AXTA’s earnings for the second quarter is currently pegged at 39 cents. It currently carries a Zacks Rank #2.
Kinross Gold Corporation (KGC - Free Report) , which is scheduled to release earnings on Aug 2, has an Earnings ESP of +5.56% and carries a Zacks Rank #3.
The Zacks Consensus Estimate for earnings for KGC for the second quarter is pegged at 9 cents.
Image: Bigstock
Dow (DOW) Gears Up for Q2 Earnings: What's in the Cards?
Dow Inc. (DOW - Free Report) is scheduled to come up with second-quarter 2023 results before the opening bell on Jul 25.
The company surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missed once. DOW delivered a trailing four-quarter earnings surprise of 13.3% on average. It posted an earnings surprise of 56.8% in the last reported quarter.
The company is expected to have benefited, in the second quarter, from its cost and productivity initiatives. However, soft demand due to weak global economic activities and plant turnaround costs are likely to have affected its performance.
Dow’s shares are up 4.3% over a year compared with 12.7% rise recorded by the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
The Zacks Consensus Estimate for revenues for Dow for the second quarter is currently pegged at $11,875 million, suggesting a decline of around 24.2% year over year.
Some Factors at Play
Dow is expected to have gained from cost-saving and productivity actions in the second quarter. It remains focused on maintaining cost and operational discipline. DOW is implementing targeted actions focused on optimizing labor and purchased service costs. Benefits of its restructuring program are also likely to get reflected on the company’s bottom line in the June quarter.
However, the company is expected to have faced headwinds from weaker demand in Europe and Asia. Lower consumer spending amid inflationary pressures is likely to have impacted demand in Europe. In the Performance Materials & Coatings segment, the company is seeing weaker demand in consumer electronics and industrial end markets. Softness across these markets is likely to have hurt volumes and sales in Performance Materials & Coatings in the second quarter of 2023. Our estimate for revenues for the Performance Materials & Coatings unit is pinned at $2,342.1 million, suggesting a decrease of around 22% year over year.
Inflationary pressures are also impacting consumer durables and building and construction demand in Europe. This is likely to have affected the Industrial Intermediates & Infrastructure segment in the quarter to be reported. Our estimate for revenues for the Industrial Intermediates & Infrastructure segment is pegged at $3,397.6 million, indicating a roughly 22.3% year-over-year decline.
In Packaging & Specialty Plastics, weaker consumer demand in Europe is likely to continue to have impacted volumes and sales in this unit. Our estimate for revenues for the Packaging & Specialty Plastics segment is currently pegged at $6,142.6 million, calling for a decline of around 25.4% year over year.
The company is also likely to have faced headwinds from plant turnaround costs in the second quarter. Increased planned maintenance activities are expected to have affected the Packaging & Specialty Plastics segment in the quarter. Dow expects an associated headwind of roughly $25 million in the second quarter. The Industrial Intermediates & Infrastructure unit is also expected to have witnessed headwinds in the quarter related to a turnaround at DOW’s Louisiana glycols facility. Costs associated with turnarounds are likely to have impacted Dow's margins.
Dow Inc. Price and EPS Surprise
Dow Inc. price-eps-surprise | Dow Inc. Quote
Zacks Model
Our proven model does not conclusively predict an earnings beat for Dow this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Dow is +0.66%. The Zacks Consensus Estimate for earnings for the second quarter is currently pegged at 70 cents. 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 #5 (Strong Sell).
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Agnico Eagle Mines Limited (AEM - Free Report) , which is scheduled to release earnings on Jul 26, has an Earnings ESP of +3.84% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for AEM’s earnings for the second quarter is currently pegged at 54 cents.
Axalta Coating Systems Ltd. (AXTA - Free Report) , which is slated to release its earnings on Aug 1, has an Earnings ESP of +6.02%.
The consensus estimate for AXTA’s earnings for the second quarter is currently pegged at 39 cents. It currently carries a Zacks Rank #2.
Kinross Gold Corporation (KGC - Free Report) , which is scheduled to release earnings on Aug 2, has an Earnings ESP of +5.56% and carries a Zacks Rank #3.
The Zacks Consensus Estimate for earnings for KGC for the second quarter is pegged at 9 cents.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.