Dow Chemical Beats Earnings Expectations, Despite Sales Slide

Dow Chemical Co. said profit rose in its latest quarter as costs fell, though adverse exchange rates and lower oil prices pushed the chemical maker's sales lower.

The Michigan-based company, which manufactures products ranging from insecticides to paint to plastics, generates about two-thirds of its revenue outside of the U.S. The stronger dollar, which makes its products more expensive abroad, has bit into results.

Though the company has benefited in recent years from high oil prices and cheap North American natural gas, as it uses cheaper U.S. gas to make plastics and consumer goods while competitors rely on pricier oil-based fuels, the sharp decline in the price of oil has hurt pricing power.

In the face of those issues, Dow brought its cost of sales down 18% in the quarter.

Overall for the period, Dow booked a profit of $1.22 billion, or 97 cents a share, up from $967 million, or 73 cents, a year earlier. Excluding resturucturing-related items, among others, per-share profit rose to 91 cents from 74 cents.

Revenue slid to $12.91 billion.

Analysts expected 83 cents in earnings per share and $13 billion in sales, according to Thomson Reuters.

In the company's plastics business--its largest--sales dropped 16% to $4.8 billion as lower pricing and currency headwinds offset volume gains. Materials and chemical sales fell 14% to $3.2 billion as pricing and currency issues countered higher demand.

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