Dow Chemical’s Loss Widens; Significant Deterioration in China
MIDLAND, Mich. - Dow Chemical saw significant deterioration in key markets during the fourth quarter, particularly in China, and posted a wider fourth-quarter loss Thursday.
The company lost $716 million, or 61 cents per share, compared with a loss of $20 million, or 2 cents per share, in the same quarter the year before.
Excluding restructuring and other charges, the Midland, Mich., company earned 33 cents per share, a penny shy of Wall Street estimates.
Revenue slipped about 1 per cent to $13.92 billion from $14.1 billion, as sales slipped in North America, Europe, and Asia. That was still better than most analysts had expected, according to a poll by FactSet.
"The second half of 2012 saw significant deterioration in the markets we serve, particularly in China," said Chairman and CEO Andrew Liveris. "In response, Dow identified and took aggressive action to mitigate the effects of a slow-to-no-growth global environment."
China earlier this month showed some signs of a rebound, but it remains vulnerable economically. The economy grew by 7.8 per cent, which was China's weakest annual performance since the 1990s.
When the economic downturn hit the U.S., Dow aggressively slashed costs and it has reacted quickly during a drawn out recovery to offset any lack of demand.
Dow said in October that it would close 20 manufacturing plants and eliminate about 2,400 jobs in reaction to slowing economic growth in Europe and elsewhere.
Fourth-quarter sales at Dow's agricultural sciences business rose 17 per cent to $1.6 billion on higher volumes and prices, but were offset by lower sales at the company's performance materials and feedstocks and energy divisions.
Overall sales volumes were flat, as a 5 per cent decline in Western Europe offset a 5 per cent increase in Asia Pacific and 1 per cent increases in both North America and Latin America, the company said.
For the full year 2012, Dow Chemical Co. earned $842 million, or 70 cents per share, down from $2.4 billion, or $2.05 per share, in 2011. Revenue fell to $56.79 billion from $59.99 billion.