Midland, MI, April 24--Dow Chemical Co. reported a nearly 28 percent drop in first quarter profits Thursday despite a surge in revenue, as increases in raw materials and energy costs ate into the bottom line. An accounting change also boosted year-ago results.
For the quarter ended March 31, the Midland-based chemical giant earned $76 million, or 8 cents per share, compared with earnings of $105 million, or 11 cents per share, in the year-earlier quarter.
Excluding a charge for an accounting change, earnings were $85 million, or 9 cents a share, in the most recent quarter. That was well ahead of analysts' expectations of a loss of 10 cents per share, according to Thomson First Call. On that basis, the comparable year-ago figures are earnings of $38 million, or 4 cents a share. Those figures discount a $67 million gain due to an accounting change.
Sales totaled $8.08 billion, 28 percent higher than in the same period last year.
“In a quarter in which feedstock and energy prices rose more than 70 percent, and with very uncertain economic conditions, we were able to reduce costs significantly, improve volumes and raise prices, resulting in a slight profit improvement,” J. Pedro Reinhard, executive vice president and chief financial officer, said in a statement.
In January, the company announced it planned to cut between 3,000 and 4,000 jobs, many through attrition or as part of trades or sales of holdings. The company had 50,000 employees at the end of 2002.
Dow also hoped to trim costs by selling or trading $1.5 billion in assets in 2003.
