Dow Chemical Co. Earnings Cheat Sheet: Profit Rises for Fourth Straight Quarter

S&P 500 (NYSE:SPY) component Dow Chemical Co. (NYSE:DOW) reported its results for the third quarter. Dow Chemical produces chemicals, plastic materials, agricultural, advanced materials, and other products and services, including insurance.

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Dow Chemical Earnings Cheat Sheet for the Third Quarter

Results: Net income for Dow Chemical Co. rose to $903 million (69 cents per share) vs. $597 million (45 cents per share) in the same quarter a year earlier. This marks a rise of 51.3% from the year earlier quarter.

Revenue: Rose 17.3% to $15.1 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: DOW reported adjusted net income of 62 cents per share. By that measure, the company fell short of mean estimate of 64 cents per share. It beat the average revenue estimate of $14.63 billion.

Quoting Management: Andrew N. Liveris, Dow’s chairman and chief executive officer, stated: “Dow delivered broad-based sales gains and significant earnings growth this quarter, reflecting the strength of our transformed business portfolio. Our diversified geographic presence was also on display, as our investments in emerging regions enabled us to capitalize on growth where it is happening most rapidly, even as developed regions paused in their economic recovery.”

Key Stats:

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 63.9% and in the first quarter, the figure rose 28.9%.

Gross margin shrank 1.4 percentage points to 14.4%. The contraction appeared to be driven by increased costs, which rose 19.3% from the year earlier quarter while revenue rose 17.3%.

Revenue has risen the past four quarters. Revenue increased 17.8% to $16.05 billion in the second quarter. The figure rose 9.8% in the first quarter from the year earlier and climbed 10.5% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company fell short of forecasts after beating estimates in the previous two quarters. In the second quarter, it topped the mark by 5 cents, and in the first quarter, it was ahead by 15 cents.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from 63 cents a share to 51 cents over the last ninety days. At $2.82 per share, the average estimate for the fiscal year has fallen from $2.94 ninety days ago.

Competitors to Watch: E.I. du Pont de Nemours & Co. (NYSE:DD), Huntsman Corporation (NYSE:HUN), Eastman Chemical Company (NYSE:EMN), PolyOne Corporation (NYSE:POL), FMC Corporation (NYSE:FMC), Westlake Chemical Corp. (NYSE:WLK), Rockwood Holdings, Inc. (NYSE:ROC), Albemarle Corporation (NYSE:ALB), Solutia Inc. (NYSE:SOA), and Ashland Inc. (NYSE:ASH).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Source: Xignite Financials)