Dow Chemical's ( DOW) second-quarter profit slid 19% from a year ago, missing estimates, and the company warned that high raw-material and energy costs will pressure earnings in the full year. Dow earned $1.02 billion, or $1.05 a share, in the quarter, down from $1.27 billion, or $1.30 a share, a year ago. Sales were $12.5 billion in the latest quarter, up from $11.5 billion last year. On average, analysts surveyed by Thomson First Call pegged second-quarter earnings at $1.13 a share and sales at $12.08 billion. "Although this was a challenging quarter, we posted record sales and healthy cash flow, despite headwinds in feedstock and energy costs," Dow said. "Industry fundamentals remain sound, although there was some softness in Agricultural Sciences, Polyethylene and Acrylic Monomers during the quarter." Dow said overall volume rose 4% in the quarter, with growth in Latin America and Asia offsetting a decline in North America, while prices "edged higher," although the gain couldn't offset "another significant increase in feedstock and energy costs, which climbed more than $800 million" from last year. "Looking ahead, given the challenges of the first half of the year, we believe it will be difficult to meet our earlier expectations that earnings in 2006 will be better than in 2005. We will continue to focus on financial discipline and cost control, and expect to see further improvements in both price and volume," the company said. "Overall we still expect that 2006 and 2007 will be very good years for Dow." Dow made $4.38 a share in 2005 and was expected to earn $4.60 a share in 2006.