The Dow Chemical Company reported sales of $11.3 billion for the second quarter of 2009, down 31 percent from reported sales in the same period last year, but up from the first quarter of 2009. Weak economic conditions in construction, automotive, manufacturing, and other segments accounted for the drop, the company said.
On a pro forma basis, sales for the second quarter were 40 percent lower than the same period last year, but 5 percent higher than the prior quarter. Pro forma historical information, the company says, reflects the combination of Dow and Rohm and Haas assuming the acquisition had been consummated on January 1, 2008; the treatment of Dow’s Calcium Chloride business as discontinued operations; and the impact of acquisition financing in place as of June 30, 2009.
At a company level, volume was down 20 percent (on a pro forma basis) versus the year-ago period, but improved 5 percent versus the prior quarter, marking the first time the company reported a sequential volume gain since the second quarter of 2008. Compared to the first quarter of 2009, volume was up in all segments except Health and Agricultural Sciences and Hydrocarbons and Energy, with growth of at least 20 percent in Electronic and Specialty Materials, Coatings and Infrastructure, and Performance Systems.
With the acquisition of Rohm and Haas completed on April 1, 2009, Dow reported that the information below for the second quarter of 2009 reflects the consolidated results of the combined entity.
• Net income (loss) from continuing operations for the quarter was a loss of $435 million. This compares with net income of $776 million in the second quarter of 2008.
• Sales in Coatings and Infrastructure were $1.2 billion for the second quarter of 2009, down 30 percent compared with the same period last year.
• Performance Systems sales, which include Epoxy and Polyurethane systems as well as Dow Wire and Cable, were $1.5 billion, down 38 percent from $2.4 billion in the second quarter of 2008.
• Performance Products sales for amines, epoxies, oxygenated solvents, and other raw materials were $2.1 billion for the second quarter of 2009, down 41 percent from the year-ago period.
• Sales for Basic Chemicals were $586 million for the second quarter of 2009, down 53 percent compared with the same period last year.
• In the Electronic and Specialty Materials segment, second quarter sales of $1.2 billion represented a 26 percent decrease from the same period last year.
• Health and Agricultural Sciences sales were $1.2 billion in the second quarter of 2009, down 12 percent from $1.4 billion in the second quarter a year-ago.
Andrew N. Liveris, Dow’s chairman and chief executive officer, said, “The economic outlook for the rest of 2009 appears to be stabilizing with strong growth in Asia Pacific, especially China, where domestic stimulus programs have created demand. In our view, the United States economy has found bottom, but will be slow in recovering as unemployment continues to be a drag on consumer spending. Therefore, our 2009 operating plan does not count on material improvements in market conditions for the remainder of the year.
“Dow has already begun to benefit from the smooth integration of Rohm and Haas and the decisive actions we took to accelerate our restructuring efforts and cost synergies. We also made significant improvements to our balance sheet, strengthening our financial structure and providing us more flexibility in how we execute our divestitures. We now have the flexibility to make the needed divestitures on both a strategic and timely basis.”
“Going forward, we will continue to manage our business with the same dedicated focus in the quarters ahead and are confident that we are on track to position Dow as an earnings growth company.”
For more information, go to www.dow.com.