Dow Q1 Results Beat Market, Announces Further Actions To Improve Profitability; Stock Up - Update

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(RTTNews) - Dow Inc. (DOW) on Thursday reported loss in its first quarter, compared to prior year's profit, with weak sales. However, operating earnings and top line were better than market estimates. Further, the company announced various actions to improve profitability and support cash flow amid ongoing macroeconomic challenges.

In pre-market activity on the NYSE, Dow shares were gaining around 3.9 percent to trade at $30.13.

Following a comprehensive review, Dow said it has decided to delay construction of its Path2Zero project in Fort Saskatchewan, Alberta, Canada until market conditions improve. The company now expects Dow's total enterprise 2025 CapEx to be $2.5 billion compared to its original plan of $3.5 billion.

In addition, the company is expanding its previously announced European asset review, primarily in Polyurethanes.

The firm is on track with its plan of at least $1 billion in targeted cost savings by 2026, including approximately $300 million in 2025.

Taken together, these new and previously announced actions total approximately $6 billion in cash support to effectively manage the extended downcycle, the firm said.

Jim Fitterling, Dow chair and CEO, said, "We continue to implement decisive actions to address persistently slow GDP growth and increased macroeconomic and geopolitical uncertainty. We expect to deliver approximately $6 billion in near-term cash support. First, we are on track to close Dow's sale of a minority stake in select U.S. Gulf Coast infrastructure assets by May 1. … Second, we expect to receive greater than $1 billion in proceeds from the NOVA judgment this year. Additionally, our decision to delay our Path2Zero project in Alberta, Canada will result in a total reduction of $1 billion in enterprise CapEx spending this year."

In its first quarter, net loss was $307 million, compared to earnings of $516 million in the same period last year. Loss per share was $0.44, compared to profit of $0.73 a year ago.

Operating earnings were $17 million or $0.02 per share for the period, compared to $0.56 in the year-ago period.

The Wall Street analysts on average expected the company to report loss of $0.01 per share. Analysts' estimates typically exclude special items.

Net sales dropped 3 percent to $10.431 billion from $10.765 billion last year, reflecting declines in all operating segments. The Street expected sales of $10.26 billion.

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