MOSCOW (MRC) -- Dow Chemical Co. ’s transformation into a slimmed-down and more profitable company is working, Chief Executive Andrew Liveris said Wednesday, citing USD1.3 billion in asset sales so far this year and a 43% boost to third-quarter profit, said The Wall Street Journal.
Dow hopes to sell lower-margin business lines to raise another USD3.2 billion to USD4.7 billion by the end of 2015. This month, Dow began shopping around Angus Chemical Co., AgroFresh and its Sodium Borohydride business—units that could bring in USD2 billion of that total, the company said.
Profit rose to USD852 million, or 71 cents a share, for the third quarter, up from USD594 million, or 49 cents a share, a year earlier. Excluding one-time items, earnings were 72 cents a share, up from 50 cents in the prior-year period. Revenue rose by 4.9% to USD14.41 billion.
Analysts surveyed by Thomson Reuters had projected 68 cents a share in earnings and USD14.31 billion in revenue, but expanding sales across all regions helped Dow beat market expectations. The company predicted it could maintain strong results, but acknowledged the global economic picture looks challenging.
Falling oil prices have sparked investor concerns about Dow and other petrochemical manufacturers in the U.S. Profit margins are bolstered in North America by cheap natural gas and other fuels that Dow and its peers use to make plastics and consumer goods, while foreign competitors tend to run plants on higher-priced oil-based feedstocks. Now that oil prices are drifting lower, some analysts have questioned whether Dow’s competitive edge may be fading.
The company’s shares are up more than 17% on the year, but have fallen nearly 8% in the last month. Mr. Liveris said competitive advantage isn’t evaporating. Dow’s margins may be squeezed in the near term, but the effect will be temporary, he said.
As MRC wrote before, Dow Elastomers, a business unit of The Dow Chemical Company, will soon break ground on its planned world-scale NORDEL EPDM (ethylene propylene-diene terpolymer) facility in Plaquemine, La., which will utilize the company’s newest proprietary catalyst technology to enable products with high Mooney viscosity.
The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber. In 2012, Dow had annual sales of approximately USD57 billion. The сompany's more than 5,000 products are manufactured at 188 sites in 36 countries across the globe.