29 avril, 2007 19:27
Dow Chemical earnings fall, but meet estimates
Euan Rocha, Reuters
Published: Thursday, April 26, 2007
By Euan Rocha
NEW YORK (Reuters) - Dow Chemical Co. on Thursday posted a nearly 20 percent fall in quarterly earnings on lower North American volumes and a slowdown in basic chemical sales.
The largest U.S. chemical company also faced tough comparisons with the year-earlier period, which benefited from strong licensing revenue.
Strong increases in shipment volumes in the Asia Pacific, Latin America and Europe failed to offset an 8 percent decline in North America.
Dow reported net income of $973 million, or $1 a share, in line with analysts estimates and down from $1.21 billion, or $1.24 a share, a year earlier.
"The fact that they came out and met expectations will certainly be viewed as neutral to positive," said HSBC analyst Hassan Ahmed.
Revenue rose 3 percent to $12.43 billion.
Dow also said it had raised its quarterly dividend by 12 percent to 42 cents a share.
"The dividend boost clearly is a step in the right direction," Ahmed said, "but that said, I would have liked to have seen (Dow) be a little more aggressive."
The Midland, Michigan based company has been facing stiff competition from Middle Eastern chemical producers that have cheap access to crude oil and natural gas.
Dow uses derivatives of crude oil and natural gas as feedstocks in its ethylene production facilities, while natural gas is also used as a fuel.
The company has said it favored a strategy of expanding its commodity businesses through joint ventures.
Some analysts have argued that Dow ought to take a more aggressive stance and unlock shareholder value through stock buybacks and spinoffs.
Last week, Dow said it would form a joint venture to expand and operate the plastics manufacturing facilities at Libya's Ras Lanuf complex, making it the first U.S. chemical company to venture into that country since the United States lifted sanctions against it.
Earlier this month, Dow and Chevron Phillips Chemical Co. said they planned to join forces in the Americas to produce plastics and raw materials used to make products ranging from car parts to foam packaging.
Dow shares have risen about 10.9 percent in the last three months, outpacing a 5.9 percent gain in the Standard & Poor's Chemicals Index <.GSPPM>.
