(Source: Associated Press/AP Online)
MIDLAND, Mich. - Dow Chemical said Thursday that revenues slid in the third quarter and the company that makes the basic ingredients for everything from toys to cars is not counting on better conditions this year or next.
The company is selling assets and slashing costs, which did allow Dow to increase net income sharply during the past three months.
Dow Chemical Co., of Midland, Mich., says profit grew to $711 million, or 63 cents per share, compared with $428 million, or 46 cents per share a year ago. Excluding one-time benefits and losses, Dow earned 24 cents per share. Revenue fell 22 percent, to $12 billion from $15.4 billion.
The company is attempting to shift much of its production to specialty chemicals to soften volatility inherent in industrial chemicals sales.
Those specialty chemicals were the best performing, while the traditional coatings and infrastructure divisions were hit hard by the economic downturn that has roiled the housing and auto markets.
Revenues from specialty materials increased 8 percent, with volumes jumping 7 percent. The company also is getting better prices. The company said materials used in light emitting diode, or LED lighting, saw a significant increase in demand.
Sales of chemicals used in things like paint and infrastructure projects, however, slumped 22 percent, or $1.3 billion. Dow said basic plastics revenue skidded 32 percent to $3.2 billion.
In September, Dow sold a Dutch subsidiary for $457 million and a Malaysian business for $328 million, and it cut its cost of sales to about $10.4 billion from $13.9 billion a year ago. It said its April acquisition of Rohm & Haas has lead to greater than expected savings, and its restructuring program has saved it more than $1 billion this year.
Dow shares rose by 76 cents to $26.26 in premarket trading.
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