Dow's Q4 net sales fall on price declines, lower volumes

Overview

• Materials science company's Q4 net sales fell 9% yr/yr to $9.5 bln

• Adjusted EPS for Q4 was a loss, but beat analyst expectations

• Company faced price declines and lower operating rates, partly offset by cost reductions

Outlook

• Dow expects Transform to Outperform to deliver $2 bln in additional near-term earnings

• Company aims to simplify operations for improved efficiency and shareholder returns

Result Drivers

• PRICE DECLINES - Dow's Q4 results were impacted by an 8% decrease in local prices year-over-year, affecting all segments

• VOLUME DECREASE - Volume decreased 2% year-over-year, led by declines in Packaging & Specialty Plastics due to lower merchant olefins sales in EMEAI

• COST REDUCTION - Dow's cost reduction program partly offset the impact of price declines and lower operating rates

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 16 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the commodity chemicals peer group is "buy."

• Wall Street's median 12-month price target for Dow Inc is $27.00, about 2.8% below its January 28 closing price of $27.78

Press Release: ID:nPnbX5WRva

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