(By Salman - iStockAnalyst Writer)The Dow Chemical Company (NYSE:
) is scheduled to report its second quarter earnings report earnings before the market open on
Thursday, July 30, 2009. Analysts on average expect the chemical maker to report quarterly loss of 8 cents a share on revenue of $13.30 billion. In the year ago period; the company earned 81 cents a share on revenue of $16.380 billion.
The Dow Chemical Company engages in the manufacture and sale of chemicals, plastic materials, agricultural, and other specialized products and services worldwide. The chemical business of the company comprises about two-thirds of the company's revenue. The company's 2008 sales totaled $57 billion.
Net income for the first quarter was $35 million, compared with $965 million a year ago. Net income attributable to the company declined to $24 million, or $0.03 per share, from $941 million, or $0.99 per share, in the prior-year quarter. Earnings per share, excluding items, were $0.12 compared with $0.99 last year. First-quarter net sales of $9.09 billion was down 39% from $14.82 billion a year ago. Analysts on average expected the company to report a loss of $0.21 per share on revenue of $11.69 billion.
The company has been hit hard by falling demand for paints and plastics amid severe recession. Early in July, the Midland, Michigan-based company announced three plant closures and 2,500 job cuts. The chemical giant said that by closing down the plants it expects to save more than $100 million annually. Dow has in place a restructuring program that aims to cut $2.5 billion from overall costs by the end of 2010.
Dow bought Rohm last April for more than $16 billion, a purchase that has added massive amounts of debt to its balance sheet and caused concern on Wall Street about the company's ability to financially survive and prosper, especially amid the recession. The company is seeking to achieve $1.3 billion in cost cutting related to its acquisition of Rohm & Haas Co. The acquisition has helped the company leverage their existing customer base and have an expanded product line / offering. Moreover, the company has significantly improved its credit profile following recent debt and equity offerings and asset sales.
Recently, Dow Chemical Co. said its wholly owned subsidiary Dow AgroSciences LLC is acquiring the majority of assets of Illinois-based corn company Pfister Hybrids.
The company has been
pursuing a strategy of switching the company away from basic chemicals that are low-margin and volatile products to more profitable and higher-margin customized or specialized chemicals (such as epoxy coating and water-treatment product).
Shares of the company are currently trading at roughly 20 times consensus 2010 EPS estimates. In terms of stock performance, Dow Chemical shares have gained 35% since the beginning of the year. On Wednesday, shares of the company rose 14 cents or 0.14% to $20.35 in afternoon trade.
Disclosure: Author doesn’t own any of the stocks mentioned here.
