The Midland, Mich., company made $973 million, or $1 a share, for the quarter ended March 31, down from the year-ago $1.21 billion, or $1.24 a share. Sales rose to $12.4 billion from $12 billion a year earlier.
Analysts were looking for a dollar-a-share profit on sales of $12.04 billion.
Dow said double-digit sales improvements in Europe, Asia Pacific and Latin America more than offset continued weakness in North America, particularly in the housing and automotive sectors.
Year over year, volume was up 1%, with solid gains across most businesses. Asia Pacific, Latin America and Europe all reported good demand growth -- with volume increases of 13%, 8% and 7%, respectively -- more than offsetting an 8% decline in North America. Price edged 2% higher, with healthy gains across most of the Company's Performance businesses and in Basic Plastics, but were dampened by lower prices in Basic Chemicals.
CEO Andrew Liveris said: "We expect solid global demand to continue through 2007, although North America will likely be slower than in 2006.
"While there was a temporary pause in feedstock and energy cost increases at the start of the year, we saw a sharp change in direction mid-way through the quarter and expect second quarter costs to be higher than the same period last year. That said, strong demand and good pricing momentum has continued through April -- reinforcing our view that 2007 will be another solid year for the company, and that our strategy will continue to maximize shareholder value for the long term."
Dow said it will raise its quarterly dividend to 42 cents after the pending 37.5-cent payout is made April 30.