Dow Inc (NYSE:DOW) shares are trading higher after the company reported third-quarter results.
Sales rose 1% year over year to $10.88 billion, beating the consensus of $10.65 billion, on higher sales in the U.S. and Canada. Adjusted EPS was $0.47, beating the consensus of $0.46.
Local prices remained flat as improvements in Packaging & Specialty Plastics were offset by decreases in Performance Materials & Coatings segments. Sequentially, local prices fell 1%.
Volume increased by 1%, aided by Performance Materials & Coatings segment. Operating EBIT rose to $641 million from $626 million a year ago, while the margin expanded by 10 bps to 5.9% for the quarter.
Segment: Packaging & Specialty Plastics sales were up 1% to $5.52 billion, and the operating EBIT margin of 11.2% was up by 250 bps.
Industrial Intermediates & Infrastructure sales fell 2% to $2.96 billion, and the operating EBIT margin was (1.8)% versus 0.7% in the year-ago quarter.
Performance Materials & Coatings sales rose 4% to $2.21 billion, and the operating EBIT margin contracted by 210 bps to 6.3%.
DOW’s operating cash flow from continuing operations for the quarter was $800 million, and free cash flow was $64 million.
DOW returned $584 million to the shareholders in the quarter, including $490 million in dividends and $94 million in share repurchases.
Jim Fitterling, chair and chief executive officer, said, “In the third quarter, Team Dow delivered our fourth consecutive quarter of year-over-year volume growth, while managing ongoing macroeconomic softness and an unplanned cracker outage in Texas.”
“Our cost-advantaged footprint in the Americas continues to provide a strong competitive edge, enabling Dow to capture demand growth in attractive markets. However, a meaningful recovery has yet to materialize in Europe and China. In addition, Europe’s regulatory environment has led to increasing challenges across many sectors and value chains.”
Outlook: Dow expects fourth-quarter revenue of ~$10.70 billion vs. consensus of $10.786 billion.
“Our financial strength will continue to support our counter-cyclical growth investments, which are focused in higher-value businesses and regions, particularly where demand is resilient and we have a competitive cost advantage. Altogether, these investments are expected to deliver more than $3 billion in underlying earnings by 2030,” added Fitterling.
Investors can gain exposure to the stock via Invesco Dow Jones Industrial Average Dividend ETF (NYSE:DJD) and FT Vest DJIA Dogs 10 Target Income ETF (BATS:DOGG).
Price Action: DOW shares are up 2% at $52.52 premarket at the last check Thursday.
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