Dow Chemical Co., the largest chemical company in the country, on Thursday said first-quarter earnings nearly tripled, driven by significant price increases and solid volume.
Quarterly income rose to $1.35 billion, or $1.39 a share, from $469 million, or 50 cents a share, last year. Earnings for the latest quarter included a gain of 5 cents a share on the sale of the company’s stake in its Equate joint venture.
Sales jumped 25 percent to $11.68 billion from $9.31 billion a year ago.
Analysts surveyed by Thomson Financial expected Dow Chemical to earn $1.05 a share on sales of $11.59 billion.
The company said volume was down 1 percent, due to the negative impact of the divestiture of certain businesses during 2004. Excluding those divestitures, volume increased more than 2 percent from last year.
“Industry fundamentals remain solid across all operating segments and geographic areas. The recovery in basics continues and we are achieving excellent earnings growth from our performance businesses, clearly demonstrating the benefits of our continued focus on cost control and margin management, as well as the strength of Dow’s business and geographic diversity,” said J. Pedro Reinhard, executive vice president and chief financial officer.
First-quarter sales in the performance plastics segment rose 26 percent to $2.73 billion, with volume up 1 percent. Price increased 25 percent, led by polyurethanes, engineering plastics and epoxy products and intermediates. Earnings before interest, income taxes and minority interest, or EBIT, more than doubled to $478 million in the segment. Performance chemicals sales rose 25 percent to $1.97 billion, driven by price as volume remained unchanged. Agricultural sciences revenue rose 7 percent to $989 million, with volume up 3 percent and price rising 4 percent. EBIT rose to $394 million from $142 million.
“The company expects to continue to see year-over-year earnings improvements through 2005 and further earnings growth in 2006,” said Reinhard.
Analysts are looking for Dow Chemical to earn $4.48 a share on sales of $45.86 billion for 2005.
