Dow Chemical has supported the decision made by the Department of Energy (DOE) regarding export of liquefied natural gas (LNG). The DOE has conditionally authorized Freeport LNG Expansion, L.P. and FLNG Liquefaction LLC to export domestically produced LNG to countries that do not have a Free Trade Agreement (FTA) with the U.S from the Freeport LNG Terminal in Texas.
The terminal is conditionally authorized to export at a rate of up to 1.4 billion cubic feet of natural gas a day for a period of 20 years should it clear an environmental review and secures final regulatory approval.
Dow, which fully appreciates the resolution of DOE, finds it to be a measured and a balanced approach, providing more clarity and certainty required for businesses to take crucial investment decisions.
Dow feels that it should create an environment that encourages production and smart regulation. The decision by DOE will allow domestic manufacturers to continue to further advance the revival of American manufacturing.
Shale gas revolution in the U.S. has created a compelling and competitive advantage for domestic manufacturing industry. It is leading to increased natural gas production and providing assurance to domestic manufacturers who seek to invest in the U.S. and create jobs, as Dow is doing in the U.S. Gulf Coast.
Dow reported its first-quarter 2013 results last month. The company posted a profit of $550 million or 46 cents a share, a roughly 33% rise from $412 million or 35 cents a share earned a year ago. Profits soared on the strength of the agriculture science business, which witnessed record sales of seeds and crop protection products.
Excluding one-time items, Dow earned 69 cents a share in the quarter, up from 61 cents a year ago. It comfortably beat the Zacks Consensus Estimate of 60 cents.
Dow will focus on organically growing its attractive businesses and driving earnings growth, leveraging its feedstock strength. The company will also continue to pursue its cost reduction strategy while reducing debt and maximizing shareholder returns. However, Dow does not see a material improvement in the macroeconomic environment this year.
Dow currently holds a Zacks Rank #3 (Hold).
Other companies in the chemical industry having favorable Zacks Rank are Shin-Etsu Chemical Co., Ltd. (SHECY - Free Report) , Celanese Corporation (CE - Free Report) and Methanex Corporation (MEOH - Free Report) . All of them retain a Zacks Rank #1 (Strong Buy).