Dow Shares Lower on Mixed Second-Quarter Results

Dow (DOW) shares were trading lower after the materials-sciences giant reported mixed second-quarter results and cut its planned capital expenditure for the year by $500 million.

The Midland, Mich.-based company on Thursday reported per-share operating income of $0.86 for the quarter ended June 30, down from $1.41 in the prior-year period but ahead of Capital IQ’s consensus for $0.84.

Sales fell to $11.01 billion, down from last year’s $12.85 billion and the Street’s expectation of $11.27 billion, led lower by price declines in polyethylene, siloxanes and isocyanates, as well as lower sales of hydrocarbon co-products.

Shares were down nearly 2.4% in early afternoon trading.

“In spite of challenging market conditions, our results reflect the benefit of Dow’s streamlined and more-focused portfolio, continued cost synergy and stranded cost removal,” said Chief Executive Jim Fitterling. “In the quarter, we faced margin compression in our intermediate products in both our core business and equity earnings.”

Dow said industrial intermediates and infrastructure net sales slid to $3.34 billion in the second quarter from $3.97 billion last year. Volume slid 1% while local prices fell 12%. Currency headwinds shaved 3% off of net sales.

Performance materials and coatings net sales declined to $2.36 billion from $2.67 billion as volume and prices each slid 5% while currency impacts dented sales by 2%.

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