Dow Cuts Costs And Turns Profit; Outlook Cautious

SANDY SHORE

Better but not good was the third-quarter message from Dow Chemical Co., which produces basic ingredients used to make everything from automobiles to toys and diapers.

What Dow sells makes its way into so many products that the company's performance and what it sees coming can serve as an early barometer for consumer sentiment.

The company, based in Midland, Mich., saw a modest uptick in revenue from the second quarter, even in chemicals used in the distressed housing and automobile industry. That suggests the market has stabilized somewhat, said Andrew Liveris, Dow's chairman and CEO.

Yet through next year, Liveris said, "operating plans do not count on material improvements in market conditions and we remain tightly focused on those factors we can control, such as costs."

Dow has spent the past nine months slashing costs by cutting thousands of jobs, closing facilities and selling assets to lower debt.

Where the company is seeing strong growth is not at home, but in China. About 13 percent of Dow's pro forma sales are in the Asia Pacific, and 38 percent are in North America.