Dow Chemical posts record breaking sales in Q3 2008

The Dow Chemical Company reported a record breaking Q3 sales of US$15.4 bln for Q3 2008, 13% higher than the same period last year. The company's Q3 2008 net income stood at US$428 mln as against US$403 mln in Q3 2007, reflecting US$81 mln in costs (after tax) related to Hurricanes Gustav and Ike, a US$27 mln charge for purchased in-process research and development related to recent acquisitions, and expenses of US$18 mln related to the Company's pending acquisition of Rohm and Haas. Earnings for the quarter of US$0.46 per share were unfavorably impacted by the hurricanes ($0.09 per share in costs and $0.03 per share in margin on lost sales), purchased in-process research and development charges of US$0.03 per share, and acquisition-related expenses of US$0.02 per share. Price was 22% higher than the same quarter last year, with double-digit increases in all operating segments and in all geographic areas. This was the largest year-over-year percentage increase in price since the first quarter of 2005. However, feedstock and energy costs surged US$2.6 bln over the same period last year. Volume was down 9% compared with the same quarter last year, reflecting declining global demand, the impact of Hurricanes Gustav and Ike, various asset shutdowns and divestitures, and the joint venture formation of Americas Styrenics. Volume was also impacted by the Company's focus on increasing selling prices in the quarter. Excluding the impact of acquisitions, divestitures and the hurricanes, volume was down 5%. In the Performance Plastics segment, third quarter sales increased 10% over the same period last year to US$4.3 bln. Price increased 14%, with double-digit gains in all geographic areas, while volume declined 4%. Q3 EBIT (earnings before interest, income tax and minority interests) for the segment was US$146 mln, compared with US$409 mln in the same quarter in 2007. In Performance Chemicals segment, Q3 2008 sales stood at US$2.5 bln up 14% compared with US$2.2 bln posted in the same period last year. Globally, price was up 21%, with increases in all businesses and in all geographic areas. Performance Chemicals reported EBIT of US$275 mln for the quarter, compared with US$219 mln for the same period last year. In Basic Plastics segment, sales rose 7% to US$3.5 bln, up from US$3.3 bln in the same period last year. Price increased 25%, and was up in all businesses and in all geographic areas. EBIT for Basic Plastics was US$481 mln compared with US$556 mln in the same period last year. The company's Basic Chemicals segment saw sales of US$1.5 bln for the quarter were flat with the same period last year. The segment recorded a 20% gain in price, and a 20% decline in volume. EBIT for the segment was US$64 mln, compared with US$205 mln in the third quarter of 2007.