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Dow Inc. (DOW) Down 0.6% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Dow Inc. (DOW - Free Report) . Shares have lost about 0.6% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Dow Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Dow's Earnings and Revenues Top Estimates in Q2
Dow recorded earnings (on a reported basis) of 68 cents per share in second-quarter 2023, down from $2.26 per share a year ago.
Barring one-time items, adjusted earnings were 75 cents per share for the reported quarter, down from $2.31 a year ago. The figure topped the Zacks Consensus Estimate of 70 cents.
Dow recorded net sales of $11,420 million for the quarter, down roughly 27% year over year. It also surpassed the Zacks Consensus Estimate of $11,368.9 million. The company saw lower sales across its segments in the quarter, hurt by softer demand and prices due to weaker macroeconomic activities. The top line was affected by lower local pricing and reduced volumes.
The company saw an 18% year-over-year decline in local prices in the reported quarter. Prices also fell 5% on a sequential comparison basis. Volumes were down 8% year over year driven by a 14% decline Europe, the Middle East, Africa and India.
Segment Highlights
Packaging & Specialty Plastics: The division’s sales fell 28% year over year to $5,940 million in the reported quarter. The figure fell short of our estimate of $6,142.6 million. Volumes were down 7% year over year while local prices fell 21% due to reduced ethylene and polyethylene prices.
Industrial Intermediates & Infrastructure: Sales for the unit tumbled 27% year over year to $3,177 million. The figure was lower than our estimate of $3,397.6 million. Local prices fell 15% in the quarter. Volumes declined 11% on lower demand in industrial, consumer durables, and building and construction applications.
Performance Materials & Coatings: Revenues from the division declined 27% year over year to $2,197 million. The figure fell short of our estimate of $2,342.1 million. Volumes fell 10% while local price went down 16%. Volumes were impacted by declines in all regions and businesses.
Financials
Dow had cash and cash equivalents of $2,924 million at the end of the quarter, up around 24% year over year. Long-term debt was $14,735 million, up around 13% year over year.
Cash provided by operating activities from continuing operations was more than $1.3 billion in the reported quarter.
Outlook
Moving ahead, Dow said that it remains focused on cost-savings actions and will continue to advance its longer-term strategic priorities as it faces a challenging macroeconomic environment in the second half of 2023. It is making progress with its actions to deliver $1 billion in cost savings in 2023. Its disciplined and balanced capital allocation priorities are supporting its “Decarbonize and Grow” strategy to deliver long-term value creation for its shareholders, the company noted.
The company expects net sales in the band of roughly $10.25-$10.75 billion for the third quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -47.98% due to these changes.
VGM Scores
Currently, Dow Inc. has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Dow Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Dow Inc. (DOW) Down 0.6% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Dow Inc. (DOW - Free Report) . Shares have lost about 0.6% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Dow Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Dow's Earnings and Revenues Top Estimates in Q2
Dow recorded earnings (on a reported basis) of 68 cents per share in second-quarter 2023, down from $2.26 per share a year ago.
Barring one-time items, adjusted earnings were 75 cents per share for the reported quarter, down from $2.31 a year ago. The figure topped the Zacks Consensus Estimate of 70 cents.
Dow recorded net sales of $11,420 million for the quarter, down roughly 27% year over year. It also surpassed the Zacks Consensus Estimate of $11,368.9 million. The company saw lower sales across its segments in the quarter, hurt by softer demand and prices due to weaker macroeconomic activities. The top line was affected by lower local pricing and reduced volumes.
The company saw an 18% year-over-year decline in local prices in the reported quarter. Prices also fell 5% on a sequential comparison basis. Volumes were down 8% year over year driven by a 14% decline Europe, the Middle East, Africa and India.
Segment Highlights
Packaging & Specialty Plastics: The division’s sales fell 28% year over year to $5,940 million in the reported quarter. The figure fell short of our estimate of $6,142.6 million. Volumes were down 7% year over year while local prices fell 21% due to reduced ethylene and polyethylene prices.
Industrial Intermediates & Infrastructure: Sales for the unit tumbled 27% year over year to $3,177 million. The figure was lower than our estimate of $3,397.6 million. Local prices fell 15% in the quarter. Volumes declined 11% on lower demand in industrial, consumer durables, and building and construction applications.
Performance Materials & Coatings: Revenues from the division declined 27% year over year to $2,197 million. The figure fell short of our estimate of $2,342.1 million. Volumes fell 10% while local price went down 16%. Volumes were impacted by declines in all regions and businesses.
Financials
Dow had cash and cash equivalents of $2,924 million at the end of the quarter, up around 24% year over year. Long-term debt was $14,735 million, up around 13% year over year.
Cash provided by operating activities from continuing operations was more than $1.3 billion in the reported quarter.
Outlook
Moving ahead, Dow said that it remains focused on cost-savings actions and will continue to advance its longer-term strategic priorities as it faces a challenging macroeconomic environment in the second half of 2023. It is making progress with its actions to deliver $1 billion in cost savings in 2023. Its disciplined and balanced capital allocation priorities are supporting its “Decarbonize and Grow” strategy to deliver long-term value creation for its shareholders, the company noted.
The company expects net sales in the band of roughly $10.25-$10.75 billion for the third quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -47.98% due to these changes.
VGM Scores
Currently, Dow Inc. has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Dow Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.