Dow AgroSciences and Financial Results and Public Companies and Life Science & Biotech

Dow AgroSciences' profit rises despite lower revenue

April 28, 2010

Indianapolis-based Dow AgroSciences' first-quarter profit increased nearly 6 percent, to $384 million, over the same period of 2009, primarily due to higher profit margins from a stronger mix of products, the company said Wednesday morning.

Strong farmer acceptance of new products and seed acquisitions partially offset the impact of unseasonably cold spring weather across the northern part of the globe and continued pricing pressure on certain agricultural chemicals, Dow AgroSciences said.

Revenue dipped 8 percent, to $1.3 billion, from $1.4 billion in the first quarter of 2009, due to an oversupply of glyphosate, which hurt demand for the herbicide.

Meanwhile, Dow AgroSciences’ parent company, Midland, Mich.-based Dow Chemical Co., on Wednesday reported its best quarterly results in more than a year as it benefited from growing demand and price increases.

Profit rose to $466 million from just $24 million in the first quarter a year ago. The nation's largest chemical maker said the results show that demand is growing in developed markets, which were hit hardest by the recession. Strong growth in emerging markets continues to boost the manufacturing sector, Dow said.

“Overall the global economic environment is on a stronger footing and there are signs that this will continue for the foreseeable future,” CEO Andrew Liveris said in a statement. “This is good news for Dow.”

On a per-share basis, profit rose to 41 cents per share, after paying preferred dividends, from 3 cents per share, in the same quarter last year. Excluding certain items, Dow earned 43 cents per share.

Revenue rose 48 percent, to $13.42 billion from $9.04 billion.

Wall Street expected earnings of 30 cents per share on $12.9 billion in revenue, according to a Thomson Reuters survey.

Dow Chemical raised prices by 17 percent in the first quarter and logged a 16-percent increase in sales volumes as demand grew across all of its regions.

Revenue gains were led by higher sales in its basic plastics business, which posted a 49-percent sales increase. Performance products revenue climbed 41 percent.

Revenue in its electronic and specialty-materials segment and its performance-systems unit rose 30 percent, while revenue from its coatings and infrastructure business grew 21 percent.

Last year, Dow acquired Rohm & Haas for $16.5 billion to expand into the more profitable specialty chemicals business. The company said the acquisition and cost cuts allowed it to save $275 million in the period.

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