Commentary: Dow Chemical's first-quarter results fail to excite investors

30 April 2012 00:00  [Source: ICB]

Investors were not impressed with US-based Dow Chemical's first-quarter earnings results. Underlying earnings per share of $0.61 modestly beat Wall Steeet consensus estimates of $0.59, but shares of Dow fell more than 3% as of press time last Thursday morning.

Shares of Dow had run up in previous days in anticipation of strong first quarter results.

Dow's underlying earnings before interest, tax, depreciation and amortization (EBITDA) declined by 14.6% year on year to $2.09bn (€1.58bn).

Adjusted sales rose by 4% year on year on 3% higher volumes and a 1% improvement in pricing. Performance plastics volumes and prices were essentially flat on a comparable basis.

It was not the most exciting earnings performance. And the outlook also appears mixed on a macro basis, with an improving US economy and cost advantages related to abundant shale gas, moderating growth in China, Germany showing signs of improvement and Western Europe mired in recession.

Chairman and CEO Andrew Liveris expects that "global growth will gain momentum as we move through the second quarter and into the remainder of the year."

Yet the number-one factor dampening sentiment is the debt crisis in Europe - it bears watching.

By: Joseph Chang
+1 713 525 2653

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