Dow Chemical ( DOW) trounced fourth-quarter targets Thursday, saying a drop in energy prices supported recovery of its profit margins.

The Midland, Mich., chemicals company made $975 million, or $1 a share, for the quarter ended Dec. 31. That's down from the year-ago $1.1 billion, or $1.12 a share. Excluding certain items, earnings fell to 98 cents a share from $1.02 a share a year ago -- a nickel ahead of the Thomson Financial analyst consensus estimate.

Sales rose 3% from a year ago to $12.24 billion, beating the $12.12 billion Wall Street target.

Dow said lower energy prices create "a positive macroeconomic backdrop that should help ensure healthy demand for our products and generate solid results through the year ahead."