Midland, MI, October 26, 2006--Dow Chemical Co. said Thursday its third-quarter earnings fell 36 percent due to a hefty restructuring charge related to asset shutdowns, but results beat Wall Street expectations as strong pricing helped offset increased feedstock and energy costs.
Net income declined to $512 million, or 53 cents per share, from $801 million, or 82 cents per share, a year ago. Excluding restructuring charges of 45 cents per share, the company earned 98 cents in the latest period, a new quarterly record.
Sales totaled $12.36 billion, up 10 percent from last year's $11.26 billion.
On average, analysts surveyed by Thomson Financial were looking for profit of 92 cents per share on sales of $11.99 billion.
"This was an excellent quarter -- record third quarter sales, solid price increases across virtually every business and in every geographic region, encouraging volume growth in our Performance segments, operating rates that were the highest since the first quarter of 2005, and record equity earnings," said Geoffery E. Merszei, chief financial officer.
The company said a continued focus on price/volume management helped secure an 11 percent price improvement, driving year-over-year margin recovery despite an increase of almost $750 million in feedstock and energy costs. Dow's perrformance segments posted solid volume growth, with combined growth in all geographic regions and particular strength in Asia Pacific, where volume increased 17 percent.
Looking ahead, Dow said it expects the solid demand seen by many of its businesses to continue into the fourth quarter, although the ongoing volatility in feedstock and energy costs does create some uncertainty in customer buying patterns.
"With relative price stability and falling raw material costs as we move through the fourth quarter, we expect margin recovery in the Performance businesses," added Merszei. "2006 is turning out to be another tremendous year for the company -- and we have every reason to believe that 2007 will be yet another very good year for Dow."
