Weakness in Europe Leads to Weak Earnings For Dow Chemical
The Dow Chemical Company (NYSE: DOW) reported earnings before the market open on Thursday that missed analyst estimates. The chemical company reported a 34 percent decrease in profits versus the prior-year quarter.
The company reported earnings of $0.55 per share, compared to earnings of $0.84 per share in the same quarter last year. Analysts had estimated earnings of $0.64 per share. Revenues dropped 10 percent from the second quarter of 2011 to $14.5 billion, below estimates of $15.69 billion.
The company attributed declining sales to a weak economy in Europe.
Sales in Europe decreased by 15 percent, and currency conditions led to a loss of $400 million.
Andrew N. Liveris, Dow's Chairman and Chief Executive Officer, stated, "World economic activity saw marked deterioration throughout the second quarter, driven primarily by Europe's persistent recessionary conditions. Activity in China and elsewhere in the emerging world has decelerated, and recovery in the United States is moderating from its momentum earlier this year, due to weakening consumer confidence, softer trade flows, and high unemployment."
The Agricultural Sciences posted record breaking results. The segment reported second quarter sales of $1.7 billion, up about 12 percent in comparison to the same period last year. There was also an increase in volume in the agricultural sector by 10 percent. Observers are closely watching the Agricultural Sciences segment because of the recent extreme weather conditions that have hit the US. All other segments experienced a decrease in sales.
When commenting on the future, Liveris remarked, “Dow remains intensely focused on execution – maximizing our world-leading feedstock advantage, driving operating rate improvements in our integrated portfolio, tailoring growth investments to reflect macroeconomic realities, and ensuring prudent use of cash."
The Dow Chemical Company traded down about 3.7 percent on Thursday.
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