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Dow's (DOW) Earnings and Revenues Surpass Estimates in Q4
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Dow Inc. (DOW - Free Report) slipped to a loss (on a reported basis) of $105 million or 15 cents per share in fourth-quarter 2023 from a profit of $613 million or 85 cents per share a year ago.
Barring one-time items, adjusted earnings were 43 cents per share for the reported quarter, down from 46 cents a year ago. The figure topped the Zacks Consensus Estimate of 40 cents.
Dow recorded net sales of $10,621 million for the quarter, down roughly 10% year over year. It, however, surpassed the Zacks Consensus Estimate of $10,316.3 million. The company saw lower sales across its segments in the quarter, hurt by weaker macroeconomic activities. The top line was affected by lower local pricing, which more than offset higher volumes.
Local prices fell 13% year over year in the reported quarter on declines in all segments. Prices were flat on a sequential comparison basis. Volumes were up 2% year over year driven by gains across all regions barring Asia Pacific.
Packaging & Specialty Plastics: The division’s sales fell 7% year over year to $5,641 million in the reported quarter. The figure was ahead of our estimate of $5,465.7 million. Volumes were up 3% year over year while local prices fell 11% due to reduced pricing globally.
Industrial Intermediates & Infrastructure: Sales for the unit declined 19% year over year to $2,948 million. The figure surpassed our estimate of $2,858.5 million. Local prices fell 17% in the quarter. Volumes declined 2% on lower supply availability.
Performance Materials & Coatings: Revenues from the division fell 8% year over year to $1,894 million. The figure was below our estimate of $1,959.2 million. Volumes rose 3% while local price went down 12%. Volumes increased on higher volumes in project-driven building and construction markets.
FY23 Results
Earnings for 2023 were 82 cents per share compared with $6.28 per share a year ago. Net sales were $44,622 million for the full year, down around 22% year over year.
Financials
Dow had cash and cash equivalents of $2,987 million at the end of 2023, down around 23% year over year. Long-term debt was $14,907 million, up around 1% year over year.
Cash provided by operating activities from continuing operations was $1.6 billion in the reported quarter while free cash flow was $870 million.
The company implemented targeted actions to deliver $1 billion in cost savings for the year.
Dow also returned $616 million to shareholders in the quarter through dividends and share buybacks.
Outlook
Moving ahead, Dow said that it will maintain its commitment to financial and operational discipline as it navigates dynamic market conditions in 2024. The company envisions the weakness in industrial and durable goods demand to continue in the first quarter of 2024.
However, Dow is seeing early positive signs in areas such as construction, automotive and consumer electronics. DOW also remains committed to its disciplined and balanced capital allocation priorities. Moreover, the company is advancing its Decarbonize and Grow and Transform the Waste strategies, which are expected to deliver more than $3 billion in underlying earnings annually by 2030.
Price Performance
Shares of Dow are down 8.6% over a year compared with the industry’s 16.7% decline.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Dow currently has a Zacks Rank #4 (Sell).
Better-ranked stocks worth a look in the basic materials space include, Cameco Corporation (CCJ - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and The Andersons Inc. (ANDE - Free Report) .
Cameco has a projected earnings growth rate of 188% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 12.5% over the past 60 days. The stock has shot up around 76% in a year. CCJ currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Carpenter Technology’s current fiscal year earnings is pegged at $3.97, indicating a year-over-year surge of 248.3%. CRS, carrying a Zacks Rank #1, beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 42% in the past year.
Andersons currently carries a Zacks Rank #1. ANDE beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average. The company’s shares have rallied 40% in the past year.
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Dow's (DOW) Earnings and Revenues Surpass Estimates in Q4
Dow Inc. (DOW - Free Report) slipped to a loss (on a reported basis) of $105 million or 15 cents per share in fourth-quarter 2023 from a profit of $613 million or 85 cents per share a year ago.
Barring one-time items, adjusted earnings were 43 cents per share for the reported quarter, down from 46 cents a year ago. The figure topped the Zacks Consensus Estimate of 40 cents.
Dow recorded net sales of $10,621 million for the quarter, down roughly 10% year over year. It, however, surpassed the Zacks Consensus Estimate of $10,316.3 million. The company saw lower sales across its segments in the quarter, hurt by weaker macroeconomic activities. The top line was affected by lower local pricing, which more than offset higher volumes.
Local prices fell 13% year over year in the reported quarter on declines in all segments. Prices were flat on a sequential comparison basis. Volumes were up 2% year over year driven by gains across all regions barring Asia Pacific.
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 7% year over year to $5,641 million in the reported quarter. The figure was ahead of our estimate of $5,465.7 million. Volumes were up 3% year over year while local prices fell 11% due to reduced pricing globally.
Industrial Intermediates & Infrastructure: Sales for the unit declined 19% year over year to $2,948 million. The figure surpassed our estimate of $2,858.5 million. Local prices fell 17% in the quarter. Volumes declined 2% on lower supply availability.
Performance Materials & Coatings: Revenues from the division fell 8% year over year to $1,894 million. The figure was below our estimate of $1,959.2 million. Volumes rose 3% while local price went down 12%. Volumes increased on higher volumes in project-driven building and construction markets.
FY23 Results
Earnings for 2023 were 82 cents per share compared with $6.28 per share a year ago. Net sales were $44,622 million for the full year, down around 22% year over year.
Financials
Dow had cash and cash equivalents of $2,987 million at the end of 2023, down around 23% year over year. Long-term debt was $14,907 million, up around 1% year over year.
Cash provided by operating activities from continuing operations was $1.6 billion in the reported quarter while free cash flow was $870 million.
The company implemented targeted actions to deliver $1 billion in cost savings for the year.
Dow also returned $616 million to shareholders in the quarter through dividends and share buybacks.
Outlook
Moving ahead, Dow said that it will maintain its commitment to financial and operational discipline as it navigates dynamic market conditions in 2024. The company envisions the weakness in industrial and durable goods demand to continue in the first quarter of 2024.
However, Dow is seeing early positive signs in areas such as construction, automotive and consumer electronics. DOW also remains committed to its disciplined and balanced capital allocation priorities. Moreover, the company is advancing its Decarbonize and Grow and Transform the Waste strategies, which are expected to deliver more than $3 billion in underlying earnings annually by 2030.
Price Performance
Shares of Dow are down 8.6% over a year compared with the industry’s 16.7% decline.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Dow currently has a Zacks Rank #4 (Sell).
Better-ranked stocks worth a look in the basic materials space include, Cameco Corporation (CCJ - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and The Andersons Inc. (ANDE - Free Report) .
Cameco has a projected earnings growth rate of 188% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 12.5% over the past 60 days. The stock has shot up around 76% in a year. CCJ currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Carpenter Technology’s current fiscal year earnings is pegged at $3.97, indicating a year-over-year surge of 248.3%. CRS, carrying a Zacks Rank #1, beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 42% in the past year.
Andersons currently carries a Zacks Rank #1. ANDE beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average. The company’s shares have rallied 40% in the past year.