Dow Inc. (NYSE:DOW) shares are trading lower on Thursday after the company reported fourth-quarter 2025 financial results and rolled out a cost savings plan.
Details
The chemical giant reported an adjusted loss of 34 cents per share, beating Wall Street's projected 46-cent loss, according to consensus estimates.
Revenue fell 9% year over year (Y/Y) to $9.460 billion, slightly missing the $9.462 billion estimate.
Overall, volume fell 2% Y/Y, on declines in Packaging & Specialty Plastics. This was due to lower merchant olefins sales in Europe, the Middle East, Africa, and India (EMEAI), following the idling of a regional cracker earlier in the year.
Dow posted a GAAP net loss of $1.48 billion for the quarter, compared to a loss of $35 million in the same quarter a year ago.
Additionally, operating EBIT stood at $33 million, down from $454 million in the same period a year ago.
Operating cash flow from continuing operations was $298 million, a decline of $513 million Y/Y, owing to lower earnings.
The company returned $251 million to shareholders through dividends in the quarter.
‘Transform To Outperform' Initiative
Dow launched its ‘Transform to Outperform' initiative, aiming to boost operating EBITDA by $2 billion.
Dow expects about two-thirds of these benefits to come from productivity improvements and one-third from growth.
The company anticipates $1.1–$1.5 billion in one-time costs, including $600–$800 million for severance affecting roughly 4,500 roles, and $500–$700 million in other one-time expenses.
Segment Performance
Packaging & Specialty Plastics revenue fell 11% Y/Y to $4.7 billion, as local prices fell 9% Y/Y, driven by weaker downstream polymer prices.
Industrial Intermediates & Infrastructure revenue declined 9% Y/Y to $2.7 billion, due to a decline across both businesses.
Performance Materials & Coatings revenue dropped 6% Y/Y to $1.9 billion, though operating profit rose from the year-ago quarter due to lower fixed costs.
Jim Fitterling, Dow chair and CEO, said, "In 2025, we achieved well over half of our more than $6.5 billion in near-term cash and cost support actions, including the accelerated delivery of more than $400 million in cost savings from our $1 billion program."
"At the same time – by reducing complexity, adopting the best available technologies and streamlining our end-to-end processes – Transform to Outperform is expected to provide step-change productivity gains while enabling consistent growth. We will make breakthrough improvements across our company to fundamentally simplify Dow's operating model."
Outlook
Dow sees first-quarter 2026 net revenue of $9.40 billion versus the consensus of $10.32 billion.
DOW Price Action: Dow shares were down 4.66% at $26.48 at the time of publication on Thursday, according to Benzinga Pro data.
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