Dow's third-quarter net income declines, will continue to improve cost structure

Today, Dow Corporation (DOW) released its third-quarter 2019 financial report, and its key financial data are as follows:

GAAP net income was $347 million; operating earnings before interest and taxes (EBIT) was $1 billion, compared with an estimated $6 billion in the year-ago peri.

Net sales were $18 billion, down 15% from the prior-year estimate due to lower market selling prices due to lower global energy pric.

Sales volume decreased by 2% compared to the estimated performance for the same period last ye.

Local prices were down 12% from the year-ago estimate, mainly due to lower prices for polyethylene, hydrocarbon by-products, siloxanes and isocyanat.

Equity loss was $44 million, compared with an estimated equity gain of $135 million in the year-ago peri.

Operating EBIT was $1 billion, down from a pro forma result of $6 billion in the year-ago period, reflecting tighter margins and the impact of production cuts in Argenti.

Completed $365 billion in cost optimization projects in the Materials Science business during the quarter and eliminated $40 million in idle cos.

Cash from continuing operations was $8 billion, an increase of $6 billion from the same period last ye.

Returned shareholders $600 million in the quarter, including $500 million in dividends and $100 million in share repurchas.

Will continue to improve the cost structure

Commenting on the quarter's results, Dow CEO Jim Fitterling said: "This quarter's results demonstrate that the Dow team is focused on managing operating leverage in response to a challenging business environme.

He emphasized that Dow will continue to improve its cost structure, completing $365 billion in cost optimization projects and reducing idle costs by $40 milli.

Outlook

Jim Fitterling said: "Going forward, we will continue to use our feedstock flexibility to advance low-risk, high-return growth investments and achieve our idle cost reduction targe.