Dow Chemical Co. Earnings Cheat Sheet: Strong Margins Continue as Net Income Rises

S&P 500 (NYSE:SPY) component Dow Chemical Co. (NYSE:DOW) reported net income above Wall Street’s expectations for the second quarter. The Dow Chemical Company 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 Second Quarter

Results: Net income for Dow Chemical Co. rose to $1.07 billion (84 cents per share) vs. $651 million (50 cents per share) in the same quarter a year earlier. This marks a rise of 63.9% from the year earlier quarter.

Revenue: Rose 17.8% to $16.05 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: DOW reported adjusted net income of 85 cents per share. By that measure, the company beat the mean estimate of 80 cents per share. It beat the average revenue estimate of $14.75 billion.

Quoting Management: Andrew N. Liveris, Dow’s chairman and chief executive officer, stated: “This marked another quarter of tremendous progress for Dow. We delivered significant and broad-based top-line growth, and reached a new quarterly sales record in emerging geographies. The performance of our diverse and balanced portfolio once again overcame continuing headwinds in certain sectors. More importantly, we remain firmly on the trajectory to reach our near-term earnings targets, as evidenced by EBITDA growth of nearly 25percent – up in every operating segment – as well as overall margin expansion for the Company. Further, our year-over-year EPS growth and our EBITDA run-rate of $9billion are approaching our near-term target.”

Key Stats:

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 0.6 percentage point to 15.5% from the year earlier quarter. Over that span, margins have grown on average 1.8 percentage points per quarter on a year-over-year basis.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 15 cents in the first quarter, by 12 cents in the fourth quarter of the last fiscal year, and by 13 cents in the third quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 9.8% to $14.73 billion in the first quarter. The figure rose 10.5% in the fourth quarter of the last fiscal year from the year earlier and climbed 6.8% in the third quarter of the last fiscal year from the year-ago quarter.

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).

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(Source: Xignite Financials)