MIDLAND, MI - The Dow Chemical Co., Midland, MI, reported sales of $9.1 billion for the first quarter of 2009, 39 percent lower than in the same period last year.
Net income for the quarter was $24 million. This compares with net income of $941 million in the first quarter of 2008. Reported earnings for the current quarter were $0.03 per share. Excluding certain items, earnings were $0.12 per share. This compares with earnings of $0.99 per share in the first quarter of 2008 and a loss of $1.68 per share, or a loss of $0.62 per share excluding certain items, in the fourth quarter of 2008.
Earnings in the quarter were unfavorably impacted by a pretax charge of $19 million for additional severance related to the fourth quarter of 2008 restructuring; $48 million in pretax transaction costs related to the acquisition of Rohm and Haas Co.; and the company’s $29 million share of a restructuring charge recognized by Dow Corning Corp., a 50-percent-owned nonconsolidated affiliate of Dow.
Volume declined 19 percent compared with the same quarter of 2008, while price was down 20 percent, reflecting the effects of the ongoing recessionary business climate and continued inventory de-stocking in most value chains.
Businesses in the Performance segments showed margin resiliency in the face of challenging economic conditions, reflecting both the diversity and specialty nature of the businesses in these segments. Price declines trailed the decrease in purchased feedstock and energy costs, close to $90 million compared with the same quarter last year in the combined Performance segments. Sales in Performance Chemicals decreased 35 percent to $1.5 billion from $2.3 billion posted in the same period last year.
Basic Chemicals sales for the quarter decreased 49 percent year over year to $801 million compared with $1.6 billion in 2008. The segment recorded a 21 percent decline in price and a 28 percent decrease in volume.
Sales in Dow AgroSciences were up, with volume increasing 10 percent as price held flat with the same period last year.
“Our positive earnings in this recessionary environment were the direct result of our rapid actions to reduce costs and tightly manage operations,” said Andrew N. Liveris, Chairman and Chief Executive Officer. “We achieved profitability in spite of continued weak demand throughout most of our value chains and further deflation in feedstock and energy costs, which put pressure on prices, particularly in the Basics segments. Our Performance segments, however, delivered improved operating results versus last quarter, above and beyond the seasonally strong contribution from Dow AgroSciences.”