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The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 8.7%. It posted an earnings surprise of 7.9% in the last reported quarter.
The company is expected to have benefited from firm demand across a number of end markets, higher prices and its cost and productivity initiatives. However, raw material and energy cost inflation and softer demand in Europe are likely to have affected its performance.
Dow’s shares are up 1.5% over a year compared with 3.8% rise recorded by the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
The Zacks Consensus Estimate for revenues for Dow for the fourth quarter is currently pegged at $11,787.4 million, suggesting a decline of 17.9% year over year.
The Zacks Consensus Estimate for revenues in the Packaging & Specialty Plastics segment is currently pegged at $6,785 million, calling for a decline of around 12.6% year over year.
The consensus mark for revenues in the Industrial Intermediates & Infrastructure segment is pegged at $3,552 million, indicating a roughly 21.8% year-over-year decline. The same for the Performance Materials & Coatings unit is pinned at $2,259 million, suggesting a decrease of around 11.7% year over year.
Some Factors at Play
Dow is expected to have benefited, in the fourth quarter, from higher demand across personal care, mobility, consumables and food packaging markets. The company saw strong demand for pharmaceutical, agricultural and energy applications in the third quarter.
The momentum across these markets is likely to have continued in the fourth quarter. Healthy demand and higher prices are expected to have aided its results in the December quarter.
The company is also expected to have gained from cost synergy savings and productivity actions. It remains focused on maintaining cost and operational discipline. Benefits of its restructuring program are also likely to get reflected on the company’s bottom line in the fourth quarter.
However, the company is expected to have witnessed challenges from higher raw material costs. Raw material and logistical constraints are likely to have persisted in the fourth quarter.
Higher raw material costs and logistical challenges are expected to have affected results in the Packaging & Specialty Plastics segment. The Industrial Intermediates & Infrastructure unit is also likely to have faced challenges from raw material inflation in Europe.
The Industrial Intermediates & Infrastructure segment is also expected to have faced cost headwinds in the fourth quarter stemming from higher energy costs in Europe. Higher energy costs are also likely to have affected Packaging & Specialty Plastics and Performance Materials & Coatings units, hurting margins in these segments in the fourth quarter.
Weaker demand in Europe is also expected to have weighed on Dow’s performance. The energy and feedstock inflation has resulted in reduced industrial production and consumer spending in the region. The impacts of lower consumer spending and inflation are expected to reflect on demand in Europe in the December quarter.
Our proven model does not conclusively predict an earnings beat for Dow this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Dow is -1.37%. The Zacks Consensus Estimate for earnings for the fourth quarter is currently pegged at 57 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Dow currently carries a Zacks Rank #3.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
The consensus estimate for Agnico Eagle’s fourth-quarter earnings has been stable in the past 60 days. The Zacks Consensus Estimate for AEM’s earnings for the quarter is pegged at 40 cents.
Freeport-McMoRan Inc. (FCX - Free Report) , scheduled to release earnings on Jan 25, has an Earnings ESP of +6.96% and currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Freeport’s fourth-quarter earnings has been revised 11.1% upward in the past 60 days. The consensus estimate for FCX’s earnings for the fourth quarter is currently pegged at 40 cents.
Steel Dynamics, Inc. (STLD - Free Report) , scheduled to release earnings on Jan 25, has an Earnings ESP of +14.55%.
The Zacks Consensus Estimate for Steel Dynamics’ fourth-quarter earnings is currently pegged at $3.60. STLD currently carries a Zacks Rank #1.
Image: Bigstock
Dow (DOW) Gears Up for Q4 Earnings: What's in the Cards?
Dow Inc. (DOW - Free Report) is scheduled to come up with fourth-quarter 2022 results before the opening bell on Jan 26.
The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 8.7%. It posted an earnings surprise of 7.9% in the last reported quarter.
The company is expected to have benefited from firm demand across a number of end markets, higher prices and its cost and productivity initiatives. However, raw material and energy cost inflation and softer demand in Europe are likely to have affected its performance.
Dow’s shares are up 1.5% over a year compared with 3.8% rise recorded by the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
The Zacks Consensus Estimate for revenues for Dow for the fourth quarter is currently pegged at $11,787.4 million, suggesting a decline of 17.9% year over year.
The Zacks Consensus Estimate for revenues in the Packaging & Specialty Plastics segment is currently pegged at $6,785 million, calling for a decline of around 12.6% year over year.
The consensus mark for revenues in the Industrial Intermediates & Infrastructure segment is pegged at $3,552 million, indicating a roughly 21.8% year-over-year decline. The same for the Performance Materials & Coatings unit is pinned at $2,259 million, suggesting a decrease of around 11.7% year over year.
Some Factors at Play
Dow is expected to have benefited, in the fourth quarter, from higher demand across personal care, mobility, consumables and food packaging markets. The company saw strong demand for pharmaceutical, agricultural and energy applications in the third quarter.
The momentum across these markets is likely to have continued in the fourth quarter. Healthy demand and higher prices are expected to have aided its results in the December quarter.
The company is also expected to have gained from cost synergy savings and productivity actions. It remains focused on maintaining cost and operational discipline. Benefits of its restructuring program are also likely to get reflected on the company’s bottom line in the fourth quarter.
However, the company is expected to have witnessed challenges from higher raw material costs. Raw material and logistical constraints are likely to have persisted in the fourth quarter.
Higher raw material costs and logistical challenges are expected to have affected results in the Packaging & Specialty Plastics segment. The Industrial Intermediates & Infrastructure unit is also likely to have faced challenges from raw material inflation in Europe.
The Industrial Intermediates & Infrastructure segment is also expected to have faced cost headwinds in the fourth quarter stemming from higher energy costs in Europe. Higher energy costs are also likely to have affected Packaging & Specialty Plastics and Performance Materials & Coatings units, hurting margins in these segments in the fourth quarter.
Weaker demand in Europe is also expected to have weighed on Dow’s performance. The energy and feedstock inflation has resulted in reduced industrial production and consumer spending in the region. The impacts of lower consumer spending and inflation are expected to reflect on demand in Europe in the December quarter.
Dow Inc. Price and EPS Surprise
Dow Inc. price-eps-surprise | Dow Inc. Quote
Zacks Model
Our proven model does not conclusively predict an earnings beat for Dow this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Dow is -1.37%. The Zacks Consensus Estimate for earnings for the fourth quarter is currently pegged at 57 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Dow currently carries a Zacks Rank #3.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Agnico Eagle Mines Limited (AEM - Free Report) , scheduled to release earnings on Feb 16, has an Earnings ESP of +0.84% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Agnico Eagle’s fourth-quarter earnings has been stable in the past 60 days. The Zacks Consensus Estimate for AEM’s earnings for the quarter is pegged at 40 cents.
Freeport-McMoRan Inc. (FCX - Free Report) , scheduled to release earnings on Jan 25, has an Earnings ESP of +6.96% and currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Freeport’s fourth-quarter earnings has been revised 11.1% upward in the past 60 days. The consensus estimate for FCX’s earnings for the fourth quarter is currently pegged at 40 cents.
Steel Dynamics, Inc. (STLD - Free Report) , scheduled to release earnings on Jan 25, has an Earnings ESP of +14.55%.
The Zacks Consensus Estimate for Steel Dynamics’ fourth-quarter earnings is currently pegged at $3.60. STLD currently carries a Zacks Rank #1.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.