Dow Chemical Co. said Tuesday that increased demand and higher prices for chemicals used in products ranging from consumer electronics to adhesives drove it to a second-quarter profit.
The nation's largest chemical manufacturer by sales also said better-than-expected savings from a restructuring plan put in place during the recession helped it earn $566 million, or 50 cents per share in the second quarter, after paying preferred dividends. That compares with a loss of $486 million, or 47 cents per share, a year earlier.
While revenue jumped 20 percent to $13.62 billion, it was slightly below analysts expectations, as was Dow's adjusted net income of 54 cents per share. That shortfall sent the stock down 5 percent in premarket trading. Adjusted earnings don't include one-time items such as the impact of plant outages during the quarter.
The Midland, Mich., company, which makes products ranging from cosmetic ingredients to food additives, is confident that economic momentum is building. Its view for the U.S. "remains guardedly optimistic." Dow still thinks the global recovery will be led by Asia, slowly helped by the U.S., with Europe lagging.
Dow said sales were mostly driven by higher prices. Volume overall increased 7 percent, led by the performance segment, which makes things like electrical laminates and heat transfer fluids for solar power products.
Sales of electronic and specialty materials rose the sharpest as volume jumped 20 percent. Dow reported double-digit sales gains in all geographic areas, led by North America.
Analysts, who generally leave out one-time items from their estimates, expected net income of 56 cents a share on revenue of $13.69 billion.
Shares dropped $1.41, or 5 percent, to $26.92 in trading before the market opened. The stock has traded as high as $32.05 in the past 12 months and as low as $19.75.
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