Dow Inc., a chemical company based in Midland, Michigan, announced a 27% decrease in revenue for the recent period. This decline can be attributed to lower demand and prices across all business segments. Let’s take a closer look at the key details:
The company reported sales of $11.42 billion, compared to $15.66 billion in the previous year. Analysts surveyed by FactSet had predicted sales of $11.27 billion.
After excluding one-time items, Dow Inc. reported earnings per share of 75 cents. Analysts had expected lower adjusted earnings per share of 72 cents.
Factors to Consider
Here are some important factors that influenced Dow’s performance:
Dow experienced a decrease in demand for its services, leading to an 8% decline in volumes. This can be mainly attributed to the performance of its materials and coatings divisions, as well as its industrial intermediates and infrastructure unit.
The company’s operating margin dropped to 7.7% from 15.2% compared to the previous year. Additionally, in the first quarter, margins decreased from 15.9% to 6%.
Dow observed a continuous decline in local prices during the second quarter. Prices fell by 18% compared to the same period last year and by 5% from the previous quarter. This decline can be attributed to lower demand and global energy and feedstock costs.
Dow anticipates that the macroeconomic environment will remain challenging in the second half of the year. However, they are confident in their cost-saving initiatives outlined earlier this year, which are expected to result in $1 billion of savings.