Dow Beats Earnings/Sales Estimates; Guides Higher

DOW  Dow Chemical Co. (NYSE: DOW – $61.31), looking to complete its merger with rival DuPont Co., swung to a loss in the most recent quarter, though adjusted earnings grew more than expected. During the quarter the company opted to book a more than $1 billion pretax charge to account for future asbestos-related expenses covering the next 40 years. Sales in plastics, Dow’s largest segment, grew 4% to $4.8 billion while the infrastructure solutions segment surged 41% to $2.4 billion and performance material and chemical sales edged up 1% to $2.41 billion.  Excluding this charge and other items, the company’s earnings grew 6% to $0.99 a share, up from $0.93 a year earlier on a 14% jump in revenue to $13.02 billion. Analysts had forecast earnings of $0.88 on $12.38 billion in revenue. Dow Chemical says it is confident it can solve European Commission regulatory issues related to the DuPont deal, which has been delayed to close after March of this year.

       Looking ahead, Dow sees first quarter revenue of $12.25 billion – $13.25 billion, which is higher than most analysts’ estimates of about $11.9 billion. The shares offer solid total return potential for the pull to 2019-2021. This should be supported by a healthy dividend yield (currently 3.0%) and rising earnings out to late decade. The company’s diversified portfolio ought to perform fairly well over the long haul.

dow

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: