DOW Beats on Q1 Earnings & Sales, Launches $6B Cash Support Actions

Dow Inc. DOW recorded a loss (on a reported basis) of $307 million or 44 cents per share in first-quarter 2025. This compares to a profit of $516 million or 73 cents per share a year ago. The bottom line was hurt by lower prices and restructuring charges. 

On an adjusted basis (barring one-time items), DOW logged earnings of 2 cents for the reported quarter, down from 56 cents a year ago. The figure beat the Zacks Consensus Estimate of a loss of 2 cents.

Dow recorded net sales of $10,431 million for the quarter, down 3% year over year. It, however, surpassed the Zacks Consensus Estimate of $10,271.4 million. The top line was impacted by lower sales across all segments. 

Volumes were up 2% year over year in the reported quarter, driven by gains in all regions barring Latin America, marking the sixth straight quarter of year-over-year volume growth amid a challenging macroeconomic environment. Local prices fell 3% year over year in the quarter with declines across all segments.

(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Dow Inc. Price, Consensus and EPS Surprise

Dow Inc. price-consensus-eps-surprise-chart | Dow Inc. Quote

Dow’s Segment Highlights

Packaging & Specialty Plastics: The division’s sales fell 2% year over year to $5,310 million in the reported quarter. The figure was above our estimate of $5,172.1 million. Volumes rose 4% year over year on higher licensing revenues and merchant hydrocarbon sales. Local prices fell 4% due to reduced functional polymers and polyethylene prices. 

Industrial Intermediates & Infrastructure: Sales for the unit were down 5% year over year to $2,855 million. The figure was below our estimate of $2,872.6 million. Local prices were down 4% in the quarter. Volumes rose 1% as increased volumes in industrial solutions were offset by lower volumes in polyurethanes and construction chemicals.

Performance Materials & Coatings: Revenues from the division fell 4% year over year to $2,071 million. The figure was below our estimate of $2,098.2 million. Volumes fell 1% while local prices went down 2%. Volumes fell as gains in downstream silicones were more than masked by lower volumes in acrylic monomers and upstream siloxanes.

DOW’s Financials

Dow had cash and cash equivalents of $1,465 million at the end of the quarter, down around 33% from the prior quarter. Long-term debt was $15,932 million, up around 1% sequentially.

Cash provided by operating activities from continuing operations was $104 million in the reported quarter, down from $460 million in the prior-year quarter.

Dow also returned $494 million to shareholders in the reported quarter through dividends. 

Dow’s Outlook

Moving ahead, DOW said that it remains committed to disciplined execution and increased actions to boost profitability and support cash flow. It continues to take actions to address heightened macroeconomic and geopolitical uncertainties. Dow has delayed the construction of the Fort Saskatchewan Path2Zero project amid the prevailing market conditions. Also, it is expanding the earlier announced review of European assets, mainly in polyurethanes, to address the challenging demand conditions and regulatory environment in the region. These new and earlier announced actions are expected to deliver roughly $6 billion in cash support.  

DOW is also on track to complete the sale of a minority stake in select U.S. Gulf Coast infrastructure assets by May 1. It remains committed to achieving at least $1 billion in targeted cost savings by 2026, including around $300 million this year. DOW also expects around $1 billion in capital expenditure reduction in 2025.

DOW Stock’s Price Performance

DOW’s shares are down 48.6% in a year compared with the Zacks Chemicals Diversified industry’s 25.9% decline.

DOW’s Zacks Rank & Other Key Picks

DOW currently carries a Zacks Rank #5 (Strong Sell).

Better-ranked stocks in the Basic Materials space are Hawkins, Inc. HWKN, Osisko Gold Royalties Ltd OR and Intrepid Potash, Inc. IPI. While HWKN carries a Zacks Rank #1 (Strong Buy), OR and IPI carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Hawkins is expected to report first-quarter results on May 21. The consensus estimate for Hawkins’ first-quarter earnings is pegged at 74 cents. HWKN beat the consensus estimate in one of the last four quarters while missed thrice, with the average earnings surprise being 6.1%.
 
Osisko Gold is scheduled to release first-quarter results on May 7. The Zacks Consensus Estimate for OR’s first-quarter earnings is pegged at 15 cents. OR has a trailing four-quarter earnings surprise of 4.4%, on average.  

Intrepid Potash is slated to release first-quarter results on May 5. The consensus estimate for IPI’s first-quarter earnings is pegged at a loss of 12 cents. The Zacks Consensus Estimate for first-quarter earnings has been stable over the past 60 days.

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This article originally published on Zacks Investment Research (zacks.com).

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