Dow Chemical Co. is cautiously optimistic about the year ahead after its fourth-quarter profit jumped on strong sales from North America to the Asian Pacific region.
The chemical manufacturing giant benefited from an expanded portfolio of products and the stronger global economy, particularly in the faster-growing regions of the world, such as China, India, Eastern Europe and Brazil.
The company expects the global economy to continue to strengthen. Yet Dow Chairman and CEO Andrew N. Liveris remains leery of inflation in emerging markets, the U.S. unemployment rate and Europe's financial problems.
"We remain prepared for a reversal in momentum," he said.
For the October-December quarter, Dow said it earned $426 million, or 37 cents per share. That compared with net income of $87 million, or 8 cents per share, a year ago. Excluding items, the Midland, Mich., company earned 47 cents a share.
Revenue rose 10 percent to $13.8 billion, topping analyst expectations for $12.5 billion.
Dow reported a 22 percent increase in sales, with double-digit gains in all geographic areas. North America led the way with a 25 percent gain.
Every business segment posted double-digit sales increases except for its coatings and infrastructure unit, which rose 6 percent.
Volume grew at 12 percent as all operating segments improved except chemicals and energy, which declined 3 percent, and coatings and infrastructure, which fell 1 percent.
Dow also put into place a 10 percent increase in prices, which offset $685 million in higher feedstock and energy costs.
Revenue from emerging nations is still booming for Dow, with growth especially strong in Thailand, India, Russia and Brazil. The company said business activity in North American and Europe showed that the economic recovery is gaining traction.
For 2010, the company earned $1.97 billion, or $1.72 per share, compared with net income of $336 million, or 32 cents per share in 2009.
Liveris told analysts during a conference call that the company has continued to shift toward specialty chemicals after its 2009 acquisition of Rohm & Haas.
He said they are looking to sell or form joint ventures for other businesses within the plastics portfolio if opportunities arise.
By 2012, Dow expects 35 percent of its revenue to come from emerging markets.
The results were similar to those from Dupont Co., which last week said fourth-quarter sales rose 14 percent to $7.74 billion. Volumes increased 12 percent and prices rose 6 percent.
Dupont's net income fell because the sales increase was offset by higher costs and the loss of pharmaceutical business from patent expirations.
Shares rose 10 cents to $36.74 in midday trading.
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