Dow expects higher earnings in 2011 and 2012 - CEO

02 November 2010 01:32  [Source: ICIS news]

MIDLAND, Michigan (ICIS)--US-based Dow Chemical expects earnings to improve year on year in 2011 and yet again in 2012, CEO Andrew Liveris said on Monday.

“While growth certainly doesn’t happen in a straight line and no one can predict the future, 2010 earnings will certainly exceed those of 2009, and we anticipate solid year-over-year earnings in 2011 and again in 2012,” said Liveris at Dow’s Investor Day in Midland.

Wall Street consensus estimates are for Dow to post earnings per share (EPS) of $1.70 (€1) in 2010 and $2.37 in 2011.

Dow’s goal is to achieve EPS of $3.50-5.50 in the “near term”, said Liveris. However, he would not specify a timeframe.

On an EBITDA (earnings before interest, tax, depreciation and amortisation) basis, Dow has increased EBITDA from $5.5bn in 2009 to a run rate of $8bn through the third quarter of 2010, noted Liveris.

Dow’s “near-term” target is generating EBITDA of $10bn, while its long-term earnings power is $15bn in EBITDA, he added.

“When you take into consideration continued volume recovery associated with even a slow-growth economy, further ramp-up of growth synergies and early gains from our innovation pipeline, we are well within the range of delivering on the $10bn EBITDA target and our 20% margins,” said Liveris.

The key elements of pushing EBITDA even further to $15bn include higher earnings from joint ventures, margin gains driven by its systems and solutions approach to customers, full realization of its growth synergies and innovation pipeline, and building in emerging markets with megaprojects, he added.

($1 = €0.72)

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By: Joseph Chang
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