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Dow CEO: Our Portfolio Is 'Built To Handle' Currency And Oil Volatility

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Dow Chemical Co (NYSE: DOW) reported better-than-expected fourth-quarter results Thursday, following which its stock opened strong. Andrew Liveris, Dow Chemical CEO, was on CNBC after the declaration of results to talk about how low oil prices and currency fluctuations impacted the company’s bottom line.

Related Link: UPDATE: Dow Chemical Posts Upbeat Q4 Earnings, Shares Rise

Impact Of Volatility In Currency Markets

“Let’s pull the volatility of currency and oil most people are dealing with through the quarter. We have a portfolio that is built to handle that sort of volatility,” Liveris said.

“We manufacture around the world. We have a geographic footprint. We buy lot of our feedstock in U.S. dollars and so the currency volatility – although it affected us and it will affect us again into this year, I am not saying it won’t affect us – but we managed that with that balanced portfolio.”

Impact Of Lower Oil

“In addition, if you look at the oil movements that occurred through the quarter, oil went down a lot. But some our feedstock went down even further,” Liveris reminded.

“Remember, we use gas-based feedstock as well; we have feedstock flexibility [...] the model we have created is to deal with this sort of volatility.”

Yearly Profits

Liveris continued, “So, record profits for the year. If you look at the quarter, we are up 31 percent on the bottom line, if you look at the whole year, up 25 percent, record cash-flows, record return of cash to shareholders of $6 billion, a record operating rate and that’s the really big one.”

Lower Oil And Demand Relationship

He went on, “Demand was actually really quite good through the quarter going into January. And if oil – lower oil – foreshadows healthier demand, it’s a windshield effect. Three, six, nine months out, demand should start to get really good, and frankly we saw that in our businesses.”

 

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