Dow Chemical

(DOW) - Get Report

said its second-quarter results missed Wall Street's estimates as a decrease in price offset higher sales volumes.

The company earned $238 million, or 26 cents a share, in the quarter, compared with $280 million, or 33 cents a share, a year ago. Excluding unusual items, Dow earned $252 million, or 28 cents a share, compared to 33 cents a year ago.

On that basis, analysts polled by Thomson Financial/First Call had been looking for 29 cents.

Second-quarter sales were down 2% to $7.2 billion from $7.34 billion last year, as sales volumes increased by 8% and prices dropped by about 10%. Dow said its margin compression was mitigated in part by the volume gains and productivity improvements, but earnings before interest and taxes fell $23 million from last year.

Dow added that the price decline affected all business segments, with the sharpest decline in the chemicals and plastics segment. All business segments also saw volume increases, led by double-digit gains in plastics, chemicals, and agricultural services.

In a statement, the company noted that earnings improved sequentially, saying "we're pleased that Dow's earnings are beginning to recover, reflecting some of the economic improvement which helped our volume growth."

Looking ahead, Dow estimates that the third quarter will be "substantially better" than the year-ago quarter, and may show a sequential improvement. First Call analysts are looking for 29 cents a share in the quarter. The company also expects "upward price momentum, as feedstock and energy costs remain stable."

Shares of Dow closed at $27.45 Wednesday before the earnings release.