Dow Chemical Posts 2Q Loss On Charges; Sees Stabilizing

Dow Chemical Co. (DOW) swung to a second-quarter loss after accounting for the costs involved with purchasing rival chemical maker Rohm & Haas, yet results excluding those charges showed a surprise profit.

The company's shares dipped 1.3% premarket to $20 each as revenue was well short of expectations. The stock had been up 26% for the month through Wednesday and more than tripled since mid-March.

Chairman and Chief Executive Andrew Liveris said the economic outlook for the rest of the year "appears to be stabilizing," with strong growth in the Asia Pacific region, and especially in China "where domestic stimulus programs have created demand."

The U.S. economy, he said, "has found bottom, but will be slow in recovering as unemployment continues to be a drag on consumer spending."

The chemical sector, which is seen as an economic bellwether because it makes parts used in most consumer products, continues to reel as cutbacks in overall spending depress orders. Dow, which is shifting its focus to high-tech, specialized materials from low-margin commodity chemicals - has sold assets and announced plant closings to cut costs after its $16.3 billion Rohm & Haas purchase in April.

Dow's loss came to $344 million, or 47 cents a share, compared with a year-earlier profit of $762 million, or 81 cents a share. Excluding restructuring and other impact, Dow would have earned 5 cents in the latest quarter.

Revenue dropped 31% to $11.3 billion.

Analysts polled by Thomson Reuters most recently were looking for an 8-cent loss on revenue of $13.02 billion.

Gross margin rose to 13.8% from 10.6%.

Volume and selling prices each dropped 20% on a pro-forma basis, which excludes Rohm & Haas.

-By Mike Barris, Dow Jones Newswires; 212-416-2330; [e-mail];