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Dow Inc. Slides Despite First-Quarter Earnings Beat

Dow says demand grew in the packaging, construction, mobility, electronics and consumer durables end markets.
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Dow Inc.  (DOW) - Get Dow Inc. Report was sliding Thursday even after the chemical maker beat Wall Street's first-quarter earnings expectations.

Shares of the Midland, Mich., company at last check were down 5.6% to $61.20.

Dow earned $1.01 billion, or $1.32 a share, almost quadruple the $258 million, or 32 cents a share, of the year-earlier quarter. Adjusted earnings came to $1.36 a share, beating the FactSet analyst consensus of $1.14. 

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"We swiftly responded to the unusual industrywide disruption from Winter Storm Uri, quickly bringing assets back online within a week and reaching pre-storm operating rates by quarter-end," Jim Fitterling, chairman and CEO, said in a statement.

Despite supply constraints, Fitterling said, "we saw demand growth as the economic recovery continued to broaden, most notably in packaging, construction, mobility, electronics and consumer durables end-markets."

Sales totaled $11.88 billion, up 22% from a year earlier and exceeding the FactSet consensus of $11.09 billion. 

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The sales increase was driven "by local price gains across all operating segments, businesses and regions," the company said.

Packaging and specialty plastics sales rose 32% to $6.08 billion, beating the FactSet consensus of $5.37 billion. 

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Industrial intermediates and infrastructure sales increased 18% to $3.61 billion, exceeding forecasts of $3.49 billion; and performance materials and coatings sales were up 3% to $2.12 billion, beating the FactSet consensus of $2.1 billion.

Dow contributed $1 billion to its U.S. pension plans and said it would freeze its U.S. plans for active employees as of Dec. 31, 2023. 

The company said these actions and the subsequent remeasurement of the U.S. plans effectively reduced Dow’s pension liability by $2.3 billion and decreased its full-year 2021 pension expense by about $200 million, inclusive of a curtailment gain.

In December, analysts at J.P. Morgan turned bullish on the company and raised their rating on Dow stock to overweight from neutral.