Updated from 6:55 a.m. EDT with information on stock movement of Dow

MIDLAND, Michigan (


) -- Shares of

Dow Chemical

(DOW) - Get Report

were climbing after the company reported higher-than-expected profit in part because of emerging-markets growth, specifically record sales in China.

Shares of the Midland, Mich.-based company rose 5.4%, or $1.45, to $28.34, as investors flocked to the stock on Dow's forecast that it expected a growing middle-class to drive demand in its emerging regions and for agriculture, energy, water and food-packaging to thrive despite a volatile global economic recovery.

Dow posted adjusted earnings of 62 cents a share in the third quarter, a penny below analysts' estimates but above year-earlier results, as sales rose 17%.

Dow said net income in the quarter was $815 million, or 69 cents a share, up from year-earlier earnings of $512 million, or 45 cents a share. Adjusted earnings last year were 54 cents a share.

Net sales were $15.1 billion, up from $12.87 billion last year. Dow said sales in emerging geographies reached $5 billion, a new quarterly record, and said it had record sales in China.

Analysts surveyed by Thomson Reuters expected Dow to earn 63 cents a share on revenue of $14.63 billion.

"In emerging regions, growth in the middle class continues to drive demand, particularly as it pertains to infrastructure and urbanization. And we continue to see bright spots in recession-resistant sectors such as agriculture, food packaging, energy and water," CEO Andrew Liveris said in a statement. "We see ongoing volatility in the pace of global economic recovery, and consequently are prepared for jagged economic conditions over the near-term."

Wells Fargo analyst Frank Mitsch said commodities would still be the large driver of Dow's results moving forward.

"We would be remiss in not recognizing that commodities are still a large driver of results," Mitsch said. "As such, current valuation appears fair with the uncertain economic backdrop."

"Dow delivered broad-based sales gains and significant earnings growth this quarter, reflecting the strength of our transformed business portfolio," Liveris said. "Our diversified geographic presence was also on display, as our investments in emerging regions enabled us to capitalize on growth where it is happening most rapidly, even as developed regions paused in their economic recovery."

Dow said pricing in the quarter rose 17%. The price gains were offset by a $1.7 billion increase in purchased feedstock and energy costs.

-- Written by Joseph Woelfel

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Joseph Woelfel

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