Dow Chemical Profit Tops Expectations

Dow Chemical, in the midst of trying to merge with DuPont Co., said profit rose in its latest quarter, thanks to a gain stemming from the sale of a chunk of its chlorine business.

Revenue, meanwhile, slid 20% due mostly to price declines and adverse foreign-exchange rates. Results topped expectations and sent shares up 3.3% in premarket trading.

Midland, Mich.-based Dow, a giant in the chemical and agriculture industries and maker of products ranging from corn seeds to plastic, in December struck a deal to combine with rival DuPont into a $120 billion company that will have about $90 billion in sales. The merged firm, if the deal is approved, expects to cut some $3 billion in costs before splitting into three separate businesses 18 to 24 months after the merger closes.

In the fourth quarter, Dow separately completed its roughly $5 billion divestiture of Dow Chlorine Products.

Dow's deal with DuPont came as industrial companies struggle amid sinking commodity prices and a strengthening U.S. dollar. For the fourth-quarter sales decline, Dow pointed to local price declines in hydrocarbons and energy, in addition to the stronger dollar that makes its products more expensive abroad.

The sales decline was offset by a large gain on the sale of the chlorine business in addition to reduced overhead costs and lower research and development spending.

For the quarter, Dow reported a profit of $3.61 billion, or $2.94 a share, up from $819 million, or 63 cents, a year earlier. Per-share results reflect the payout of preferred dividends.

Excluding a gain of $1.96 a share resulting from the aforementioned divestiture, among other items, per-share earnings rose to 93 from 85 cents.

Revenue declined 20% to $11.46 billion. Analysts projected 70 cents in adjusted earnings per share on $11.2 billion in revenue, according to Thomson Reuters.

Write to Lisa Beilfuss at [e-mail]

(END) Dow Jones Newswires

February 02, 2016 08:05 ET (13:05 GMT)

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