Midland, MI, July 28--Dow Chemical said its earnings nearly doubled in the second quarter as the company improved sales while keeping costs in check.
Net income rose to $1.27 billion, or $1.30 per share, from $685 million, or $0.72 per share, a year earlier. One-time items added $0. 10 cents share to the latest quarter results and $0. 01 per share to the year-ago figures. Excluding those gains, earnings were $0. 02 short of analysts estimates.
Sales rose 16 percent to $11.45 billion from $9.84 billion, while the cost to produce those sales rose by just 11 percent. The company credited a "focus on margin management and financial discipline" for the improvement. The revenue growth was slightly below the expectations of analysts, who were looking for sales of about $12 billion.
Dow Chemical said overall prices of its products were up 20 percent from the year-ago period, enabling the company to improve profit margins despite an increase of $900 million in costs the company incurred for feedstock and energy.
Volume fell by 4 percent, or less than 1 percent excluding businesses that contributed to year-ago results but have since been divested.
"Earnings increased ... despite a number of unplanned outages during the quarter, both at Dow facilities and at some of our joint venture operations," said J. Pedro Reinhard, executive vice president and chief financial officer. He added that the company expects to record year-over-year earnings improvement through the remainder of 2005, "and further earnings growth in 2006."
Net income results for the latest quarter included a tax benefit of 12 cents per share from the repatriation of foreign profits and charge of 2 cents per share for debt retirement.
