MOSCOW (MRC) -- Dow Inc.recorded earnings (on a reported basis) from continuing operations of 32 cents per share for first-quarter 2020 against earnings of 16 cents per share a year ago, said the company.
Barring one-time items, earnings were 59 per share for the reported quarter, falling short of the Zacks Consensus Estimate of 60 cents.
Dow realized more than $30 million of savings from stranded cost removal in the first quarter. However, it witnessed lower margins in the polyurethanes and silicones chains as well as reduced equity earnings.
Dow raked in net sales of $9,770 million for the quarter, down roughly 11% from the adjusted sales a year ago. It, however, beat the Zacks Consensus Estimate of USD9,575.7 million.
Sales fell due to lower local pricing across the board resulting from a decline in global energy prices. Currency reduced sales by 1% in the quarter.
Volumes fell 2% in the quarter as higher demand in food, health & hygiene packaging, surfactants & solvents for cleaning and coatings end-markets were more than offset by declines in polyurethanes and silicones applications. The company saw lower sequential volumes in China as the coronavirus pandemic led to slower economic activities. Dow also saw an 8% decline in local prices.
As MRC informed earlier, Dow Europe has already closed May orders for high pressure polyethylene (LDPE). It is noted that the supply of LDPE has become limited in Europe due to supply problems amid high demand. Most of the market is waiting for the May Ethylene contract to be agreed, as it will provide an indicator of a starting point for the May discussions of polyethylene prices.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.
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 (PS), polyurethane, polyethylene, polypropylene, and synthetic rubber.