Midland, MI, July 29--Dow Chemical Co. reported Thursday that increased volume and pricing drove second-quarter profits up 74 percent to easily beat Wall Street expectations.
Quarterly earnings rose 74 percent to $685 million, or 72 cents per share, from $393 million, or 43 cents per share, a year ago. Analysts surveyed by Thomson First Call expected the company to post earnings of 67 cents per share in the latest quarter.
Sales were up 19 percent to $9.84 billion from $8.24 billion, reflecting an 11 percent increase in volume and an 8 percent increase in price. The company said that purchased feedstock and energy costs rose more than $600 million compared with the second quarter of 2003, continuing to exert margin pressure on quarterly results.
Volume improved significantly with increases in all operating segments, except for hydrocarbons and energy, and across all geographic areas, with particularly strong growth in Asia Pacific and Latin America. Overall volume improved 11 percent, compared with the second quarter of 2003, while prices also strengthened -- up 8 percent overall.
J. Pedro Reinhard, chief financial officer, said, "The global economic recovery that began in the second half of 2003 appears to be firmly established, and Dow is seeing continued improvement in industry supply/demand balances in many product areas. But high and volatile feedstock and energy costs continue to be a source of uncertainty and, thus far, have prevented margins from reaching reinvestment levels."
The company said it expects to see financial performance improve through the remainder of 2004 compared with last year.
