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Dow (DOW) Q1 Earnings and Sales Top As Local Prices Jump
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Dow Inc. (DOW - Free Report) logged a profit (on a reported basis) of $1,569 million or $2.11 per share in first-quarter 2022, up from a profit of $991 million or $1.32 per share a year ago.
Barring one-time items, adjusted earnings were $2.34 per share for the reported quarter, topping the Zacks Consensus Estimate of $2.02.
Dow recorded net sales of $15,264 million for the quarter, up roughly 28% year over year. It also surpassed the Zacks Consensus Estimate of $14,486.3 million. Sales rose on the back of higher local pricing in all operating segments, businesses and regions.
The company saw a 28% year-over-year increase in local prices in the reported quarter. Prices also rose 2% on a sequential comparison basis. Volumes rose 3% year over year on gains in all operating segments and in the U.S. & Canada and Latin America.
Dow benefited from higher prices, healthy end-marker demand, disciplined execution and reduced planned maintenance activity in the reported quarter that more than offset raw material and energy cost inflation.
Packaging & Specialty Plastics: The division’s sales climbed 25% year over year to $7.6 billion in the reported quarter on higher local prices. Volumes rose 4% on gains in energy sales, olefins and polyethylene. Local prices jumped 24%. Currency reduced sales by 3%.
Industrial Intermediates & Infrastructure: Sales for the unit went up 25% year over year to $4.5 billion. Local prices went up 29% with gains in all regions and businesses. Volumes ticked up 1% as improved supply availability from the impacts of Winter Storm Uri a year ago were offset by maintenance activity at Sadara.
Performance Materials & Coatings: Revenues from the division rose 44% year over year to $3 billion. Volumes rose 8% while local price jumped 39%. Volumes rose on higher demand for silicones and coatings applications and improved supply availability.
Financials
Dow had cash and cash equivalents of $3,143 million at the end of the quarter, down around 24% year over year. Long-term debt was $14,108 million, down around 13% year over year.
Cash provided by operating activities from continuing operations was $1.6 billion in the reported quarter while free cash flow was $1.3 billion.
Dow also returned $1.1 billion to shareholders in the quarter through dividends and share buybacks.
Outlook
Moving ahead, the company said that it expects demand strength across its end markets to continue. It is advancing its strategy to decarbonize its assets and grow underlying earnings by more than $3 billion in the transition to a more sustainable world. The company is well-placed to achieve mid-cycle earnings above pre-pandemic levels as it captures higher demand for lower carbon and circular solutions, Dow noted.
Price Performance
Dow’s shares have gained 10.9% over a year compared with a 1.9% rise recorded by the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Dow currently carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Commercial Metals Company (CMC - Free Report) .
Nutrien, sporting a Zacks Rank #1, has an expected earnings growth rate of 118% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 29.6% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 60.3%, on average. NTR has rallied around 110% in a year.
AdvanSix, carrying a Zacks Rank #1, has an expected earnings growth rate of 54.7% for the current year. ASIX's consensus estimate for current-year earnings has been revised 35% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied around 93% in a year.
Commercial Metals, carrying a Zacks Rank #1, has a projected earnings growth rate of 114.7% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 35.1% upward over the past 60 days.
Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 13.7%, on average. CMC has gained around 63% in a year.
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Dow (DOW) Q1 Earnings and Sales Top As Local Prices Jump
Dow Inc. (DOW - Free Report) logged a profit (on a reported basis) of $1,569 million or $2.11 per share in first-quarter 2022, up from a profit of $991 million or $1.32 per share a year ago.
Barring one-time items, adjusted earnings were $2.34 per share for the reported quarter, topping the Zacks Consensus Estimate of $2.02.
Dow recorded net sales of $15,264 million for the quarter, up roughly 28% year over year. It also surpassed the Zacks Consensus Estimate of $14,486.3 million. Sales rose on the back of higher local pricing in all operating segments, businesses and regions.
The company saw a 28% year-over-year increase in local prices in the reported quarter. Prices also rose 2% on a sequential comparison basis. Volumes rose 3% year over year on gains in all operating segments and in the U.S. & Canada and Latin America.
Dow benefited from higher prices, healthy end-marker demand, disciplined execution and reduced planned maintenance activity in the reported quarter that more than offset raw material and energy cost inflation.
Dow Inc. Price, Consensus and EPS Surprise
Dow Inc. price-consensus-eps-surprise-chart | Dow Inc. Quote
Segment Highlights
Packaging & Specialty Plastics: The division’s sales climbed 25% year over year to $7.6 billion in the reported quarter on higher local prices. Volumes rose 4% on gains in energy sales, olefins and polyethylene. Local prices jumped 24%. Currency reduced sales by 3%.
Industrial Intermediates & Infrastructure: Sales for the unit went up 25% year over year to $4.5 billion. Local prices went up 29% with gains in all regions and businesses. Volumes ticked up 1% as improved supply availability from the impacts of Winter Storm Uri a year ago were offset by maintenance activity at Sadara.
Performance Materials & Coatings: Revenues from the division rose 44% year over year to $3 billion. Volumes rose 8% while local price jumped 39%. Volumes rose on higher demand for silicones and coatings applications and improved supply availability.
Financials
Dow had cash and cash equivalents of $3,143 million at the end of the quarter, down around 24% year over year. Long-term debt was $14,108 million, down around 13% year over year.
Cash provided by operating activities from continuing operations was $1.6 billion in the reported quarter while free cash flow was $1.3 billion.
Dow also returned $1.1 billion to shareholders in the quarter through dividends and share buybacks.
Outlook
Moving ahead, the company said that it expects demand strength across its end markets to continue. It is advancing its strategy to decarbonize its assets and grow underlying earnings by more than $3 billion in the transition to a more sustainable world. The company is well-placed to achieve mid-cycle earnings above pre-pandemic levels as it captures higher demand for lower carbon and circular solutions, Dow noted.
Price Performance
Dow’s shares have gained 10.9% over a year compared with a 1.9% rise recorded by the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Dow currently carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Commercial Metals Company (CMC - Free Report) .
Nutrien, sporting a Zacks Rank #1, has an expected earnings growth rate of 118% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 29.6% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 60.3%, on average. NTR has rallied around 110% in a year.
AdvanSix, carrying a Zacks Rank #1, has an expected earnings growth rate of 54.7% for the current year. ASIX's consensus estimate for current-year earnings has been revised 35% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied around 93% in a year.
Commercial Metals, carrying a Zacks Rank #1, has a projected earnings growth rate of 114.7% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 35.1% upward over the past 60 days.
Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 13.7%, on average. CMC has gained around 63% in a year.