Dow Reports Lower Second-Quarter Results
August 3, 2009
MIDLAND, MI - The Dow Chemical Co. has reported second-quarter results. This is the first quarterly report since the completed acquisition of Rohm and Haas Co. and therefore reflects the consolidated results of the combined entity.
Dow reported sales of $11.3 billion for the second quarter of 2009, down 31 percent from reported sales in the same period last year. On a pro forma basis, sales for the second quarter were 40 percent lower than the same period last year, but 5 percent higher than the prior quarter.
Net income (loss) from continuing operations for the quarter was a loss of $435 million. This compares with net income of $776 million in the second quarter of 2008.
Dow reported a loss for the current quarter of $0.47 per share versus earnings of $0.81 per share in the second quarter of 2008 and earnings of $0.03 per share in the first quarter of 2009.
Excluding certain items that reduced earnings per share by $0.62 (a one-time increase in cost of sales related to the fair valuation of Rohm and Haas inventories of $0.13 per share, restructuring charges of $0.43 per share, and transaction and other acquisition costs of $0.06 per share), and discontinued operations of $0.10 per share, the company earned $0.05 per share in the current quarter. This compares with earnings of $0.81 per share in the second quarter of 2008 and earnings, excluding certain items and discontinued operations, of $0.11 per share in the first quarter of this year.
At a company level, volume was down 20 percent (on a pro forma basis) versus the year-ago period, but improved 5 percent versus the prior quarter, marking the first time the company reported a sequential volume gain since the second quarter of 2008. Volume was up sequentially in all segments except Health and Agricultural Sciences and Hydrocarbons and Energy, with growth of at least 20 percent in Electronic and Specialty Materials, Coatings and Infrastructure, and Performance Systems.
Commenting on the company’s outlook, Dow’s Chairman and Chief Executive Officer Andrew N. Liveris said, “The economic outlook for the rest of 2009 appears to be stabilizing with strong growth in Asia Pacific, especially China, where domestic stimulus programs have created demand. In our view, the United States economy has found bottom, but will be slow in recovering as unemployment continues to be a drag on consumer spending. Therefore, our 2009 operating plan does not count on material improvements in market conditions for the remainder of the year.”