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The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters at an average of 20.8%. It posted an earnings surprise of 7.5% in the last reported quarter.
DOW is expected to have benefited, in the first quarter, from its cost and productivity initiatives. However, soft demand due to weak global economic activities and plant turnaround costs are likely to have affected its performance.
Dow’s shares are up 2.3% over a year compared with a 9.5% decline 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 first quarter is currently pegged at $10,839.1 million, suggesting a decline of around 4.4% year over year.
Some Factors at Play
Dow is expected to have benefited from cost-saving and productivity actions in the March quarter. It remains focused on maintaining cost and operational discipline. The company is realizing a full $300 million EBITDA run rate benefit from restructuring programs being initiated in the third quarter of 2020. DOW is implementing targeted actions focused on optimizing labor and purchased service costs, lowering turnaround spending and boosting productivity. Its targeted actions delivered $1 billion in cost savings for full-year 2023. Benefits of DOW’s restructuring programs are likely to get reflected on its bottom line in the first quarter.
However, Dow is expected to have faced headwinds from demand softness in Europe and Asia Pacific. Lower consumer spending amid inflationary pressures is likely to have impacted demand in Europe. Global industrial activities have been affected by the weaker demand recovery in China. Weak demand in industrial and durable goods is likely to have hurt volumes in the first quarter.
Inflationary pressures are impacting consumer durables and building and construction demand. This is likely to have affected the Industrial Intermediates & Infrastructure segment in the first quarter. Our estimate for revenues for the Industrial Intermediates & Infrastructure segment is pegged at $2,891.6 million, indicating a roughly 14.4% year-over-year decline.
In Packaging & Specialty Plastics, weaker consumer demand in Europe is likely to continue to have impacted volumes and sales in this unit. Prices are also expected to have remained under pressure in this segment. Our estimate for revenues for the Packaging & Specialty Plastics segment is currently pegged at $5,731.9 million, calling for a decline of 6.3% year over year.
The Performance Materials & Coatings unit is also expected to have witnessed continued pricing pressure. Our estimate for revenues for the segment is pinned at $1,957.4 million, suggesting a decline of around 14% year over year.
The company is also likely to have faced headwinds from plant turnaround costs and outages in the quarter to be reported. Higher planned maintenance activities at certain energy assets in the U.S. Gulf Coast are expected to have hurt earnings in the Packaging & Specialty Plastics segment in the quarter. A planned maintenance activity, mainly related to a PDH turnaround, is also likely to have impacted the Industrial Intermediates & Infrastructure segment. Moreover, higher planned maintenance turnaround at the Deer Park acrylic monomers site and PDH is expected to have affected the Performance Materials & Coatings unit in the first 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 -0.82%. The Zacks Consensus Estimate for earnings for the first quarter is currently pegged at 47 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 they have the right combination of elements to post an earnings beat this quarter:
The consensus estimate for AEM’s earnings for the first quarter is currently pegged at 58 cents per share.
Kinross Gold Corporation (KGC - Free Report) , slated to release earnings on May 7, has an Earnings ESP of +12.50% and carries a Zacks Rank #3 at present.
The consensus mark for KGC’s first-quarter earnings is currently pegged at 5 cents.
DuPont de Nemours, Inc. (DD - Free Report) , scheduled to release first-quarter earnings on May 1, has an Earnings ESP of +0.39%.
The Zacks Consensus Estimate for DD's earnings for the first quarter is currently pegged at 65 cents. DD currently carries a Zacks Rank #3.
Image: Bigstock
Dow (DOW) Warms Up to Q1 Earnings: What's in the Offing?
Dow Inc. (DOW - Free Report) is scheduled to come up with first-quarter 2024 results before the opening bell on Apr 25.
The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters at an average of 20.8%. It posted an earnings surprise of 7.5% in the last reported quarter.
DOW is expected to have benefited, in the first quarter, from its cost and productivity initiatives. However, soft demand due to weak global economic activities and plant turnaround costs are likely to have affected its performance.
Dow’s shares are up 2.3% over a year compared with a 9.5% decline 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 first quarter is currently pegged at $10,839.1 million, suggesting a decline of around 4.4% year over year.
Some Factors at Play
Dow is expected to have benefited from cost-saving and productivity actions in the March quarter. It remains focused on maintaining cost and operational discipline. The company is realizing a full $300 million EBITDA run rate benefit from restructuring programs being initiated in the third quarter of 2020. DOW is implementing targeted actions focused on optimizing labor and purchased service costs, lowering turnaround spending and boosting productivity. Its targeted actions delivered $1 billion in cost savings for full-year 2023. Benefits of DOW’s restructuring programs are likely to get reflected on its bottom line in the first quarter.
However, Dow is expected to have faced headwinds from demand softness in Europe and Asia Pacific. Lower consumer spending amid inflationary pressures is likely to have impacted demand in Europe. Global industrial activities have been affected by the weaker demand recovery in China. Weak demand in industrial and durable goods is likely to have hurt volumes in the first quarter.
Inflationary pressures are impacting consumer durables and building and construction demand. This is likely to have affected the Industrial Intermediates & Infrastructure segment in the first quarter. Our estimate for revenues for the Industrial Intermediates & Infrastructure segment is pegged at $2,891.6 million, indicating a roughly 14.4% year-over-year decline.
In Packaging & Specialty Plastics, weaker consumer demand in Europe is likely to continue to have impacted volumes and sales in this unit. Prices are also expected to have remained under pressure in this segment. Our estimate for revenues for the Packaging & Specialty Plastics segment is currently pegged at $5,731.9 million, calling for a decline of 6.3% year over year.
The Performance Materials & Coatings unit is also expected to have witnessed continued pricing pressure. Our estimate for revenues for the segment is pinned at $1,957.4 million, suggesting a decline of around 14% year over year.
The company is also likely to have faced headwinds from plant turnaround costs and outages in the quarter to be reported. Higher planned maintenance activities at certain energy assets in the U.S. Gulf Coast are expected to have hurt earnings in the Packaging & Specialty Plastics segment in the quarter. A planned maintenance activity, mainly related to a PDH turnaround, is also likely to have impacted the Industrial Intermediates & Infrastructure segment. Moreover, higher planned maintenance turnaround at the Deer Park acrylic monomers site and PDH is expected to have affected the Performance Materials & Coatings unit in the first 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 -0.82%. The Zacks Consensus Estimate for earnings for the first quarter is currently pegged at 47 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 they 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 Apr 25, has an Earnings ESP of +4.91% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for AEM’s earnings for the first quarter is currently pegged at 58 cents per share.
Kinross Gold Corporation (KGC - Free Report) , slated to release earnings on May 7, has an Earnings ESP of +12.50% and carries a Zacks Rank #3 at present.
The consensus mark for KGC’s first-quarter earnings is currently pegged at 5 cents.
DuPont de Nemours, Inc. (DD - Free Report) , scheduled to release first-quarter earnings on May 1, has an Earnings ESP of +0.39%.
The Zacks Consensus Estimate for DD's earnings for the first quarter is currently pegged at 65 cents. DD currently carries a Zacks Rank #3.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.