Rising Prices Bite Into Dow's Q3 Profitability, Expects $1B In Cost Savings Next Year

Rising Prices Bite Into Dow's Q3 Profitability, Expects $1B In Cost Savings Next Year
  • Dow Inc DOW reported Q3 FY22 adjusted EPS of $1.11, down from $2.75 a year ago, missing the Street estimates of $1.27.
  • Operating EBIT fell almost 60% to $1.19 billion, and EBITDA almost halved to $1.86 billion.
  • Net sales were down 5% Y/Y to $14.1 billion, beating the consensus of $13.28 billion, as gains in Performance Materials & Coating were more than offset by declines in Industrial Intermediates & Infrastructure and Packaging & Specialty Plastics. 
  • Local price increased 3% Y/Y, driven by Performance Materials & Coatings and Industrial Intermediates & Infrastructure.
  • Volume was down 4% Y/Y, as a 12% decline in EMEAI more than offset 2% volume growth each in the U.S. & Canada, and the Asia Pacific. 
  • Cash provided by operating activities was $1.9 billion. Free cash flow was $1.5 billion.
  • The company noted, "Underlying demand remains resilient in the U.S., while high energy and feedstock costs are driving record inflation and impacting demand in the Eurozone, and ongoing lockdowns in China continue to pressure consumer spending and infrastructure investments."
  • Outlook: "In the near term, we expect the macro environment to remain dynamic. As a result, we have outlined a playbook of actions that have the potential to deliver more than $1 billion in cost savings in 2023 while we continue to leverage our scale, geographic diversity, and feedstock and derivative flexibility," said Jim Fitterling, Chairman & CEO.
  • Price Action: DOW shares are down 0.82% at $44.76 during the premarket session on the last check Thursday.
  • Photo Via Company

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