Dow (NYSE:DOW) reported better-than-expected second-quarter earnings on Thursday, supported by higher selling prices across its business, particularly in polyethylene, helping offset a modest decline in sales volumes.
The stronger results prompted a positive market reaction, with the company’s shares rising more than 2% in premarket trading.
Earnings and revenue exceed forecasts
Dow posted adjusted earnings of $1.44 per share for the second quarter, comfortably ahead of analysts’ consensus estimate of $1.25.
Revenue increased 20% year over year to $12.09 billion, exceeding market expectations of $12.01 billion and improving from $10.1 billion in the same period last year.
The company said a 20% increase in local pricing across its portfolio more than compensated for a 1% decline in sales volumes.
Higher prices drive profitability
Operating EBIT reached $1.6 billion during the quarter, representing an improvement of $1.7 billion from a year earlier.
The increase reflected stronger pricing and continued benefits from Dow’s Transform to Outperform programme, which is focused on improving efficiency and reducing costs.
Chief Executive Officer Karen S. Carter said, “Team Dow delivered strong second quarter results through disciplined and timely execution, reliably serving our customers, and accelerating our self-help actions.”
She added, “We now expect to generate approximately $200 million more in benefits from Transform to Outperform this year, enabling us to increase the total in-year benefits from self-help to greater than $1.3 billion.”
Packaging business leads growth
Packaging & Specialty Plastics delivered the strongest performance among Dow’s operating divisions.
The segment generated net sales of $6.4 billion, an increase of 27% from the previous year, while operating EBIT rose by $1.2 billion to $1.3 billion.
Industrial Intermediates & Infrastructure reported net sales of $3.2 billion, up 14% year over year, while Performance Materials & Coatings recorded revenue of $2.4 billion, representing an 11% increase.
Strong cash generation supports shareholder returns
Dow generated $1.3 billion in cash from operating activities related to continuing operations during the quarter, reflecting stronger earnings across its businesses.
The company also returned $253 million to shareholders through dividend payments, continuing its focus on capital returns alongside operational improvements.
Dow Inc stock price
