Dow Chemical's Q4 sales down 23% year on year

The Dow Chemical Company posted sales of US$10.9 bln for the Q4 - 2008, representing a 23% decline compared with the same period last year. The company's net loss for the quarter stood at US$1,552 mln against a net income of US$472 mln in the Q4 - 2007. Q4's net loss reflects the impact of net after-tax charges of US$978 mln related to restructuring activities, goodwill impairment losses, the impact of Hurricanes Gustav and Ike, K-Dow related expenses, purchased in-process research and development charges and expenses related to the announced acquisition of Rohm and Haas Company. Dow's reported a loss per share of $1.68 (included charges totaling $1.06 for the items referenced above) compared with earnings per share of $0.49 in same quarter previous year. For 2008, Dow's net income stood at US$579 mln (including certain items with a net unfavorable impact of US$1.1 bln) compared to US$2.9 bln in 2007 (including certain items with a net unfavorable impact of US$735 mln). The annual sales posted for FY2008 were US$57.5 bln, 7% higher than last year's record of US$53.5 bln. Sales volume was down 5%, with declines in all geographic areas except India, Middle East and Africa. In Performance Plastics segment, Q4 - 2008 sales were US$3.16 bln, down 20% from the same period last year. The Performance Plastics segment reported a loss in fourth quarter EBIT of US$479 mln as compared to EBIT of US$158 mln in the same quarter last year. In Performance Chemicals segment, the company reported a 7% decrease in sales to US$1.97 bln versus sales of US$2.13 bln in the fourth quarter of 2007. The Basic Plastics segment sales declined 38% to US$2.17 bln compared with sales of US$3.49 bln in the same period last year. Volume in this segment was down 23%, reflecting the collapse in demand that took place in the quarter. Dow's Basic Chemicals sales for the quarter were down 39 % YOY to US$992 mln from US$1.63 bln in 2007. Volume was down 33 % with two-digit volume declines reported in all geographic areas. The company is expecting low demand levels into the early quarters of 2009 much like latter period of 2008 indicated by the company's low inventory levels. The management has made intentions clear to implement cost and capital curtailment measures going into early period of this fiscal. However, Dow expects a likely revamping in demand backed by government stimuli in latter period of 2009 form where the acceleration could take off.
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