Surging 51-fold! BASF and Dow deliver Q2 financial turnarounds—among global chemical firms pursuing ‘slimming down and upgrading quality,’ who’s the top performer?

In late July 2026, two global chemical and plastics industry leaders—BASF and Dow—released their full second-quarter financial results: On July 23, Dow reported a dramatic turnaround—from a $801 million net loss in Q2 2025 to an $802 million net profit in Q2 2026; on July 29, BASF disclosed its Q2 figures, reporting a net profit of €4.1 billion (up from €79 million in Q2 2025), a staggering 51-fold year-on-year increase, and raised its full-year earnings guidance. Both companies operate across North America and Europe and cover the full spectrum—from polyolefins and materials to coatings and fine chemicals. Their profits rebounded sharply in tandem, yet key drivers of profitability, cash flow structures, and asset management strategies diverged significantly. Concurrently, major Chinese private-sector refining-and-petrochemical players—including Orient Hengsheng, Rongsheng Petrochemical, and Hengyi Petrochemical—issued half-year profit forecasts showing explosive growth across the board. Thus, the robust Q2 2026 earnings recovery across the global plastics and chemicals sector has become widely acknowledged. This article analyzes both companies’ complete financial reports, comparing commonalities and core differences to unpack the underlying logic driving this market rally. Comprehensive Comparison of Key Q2 Performance Metrics for Both Giants (I) Dow Chemical: Polyolefins Cycle Windfall Realized; Core Operating Profits Fully Recovered Dow’s Q2 2026 net sales totaled $12.092 billion, up 20% year-on-year; average product prices rose 20%, while favorable exchange rates contributed an additional 1% to revenue growth; overall volume declined only slightly by 1%. The profit reversal was striking: a $801 million net loss in Q2 2025 versus an $802 million net profit in Q2 2026; operating EBIT reached $1.648 billion, compared to a $21 million loss in Q2 2025—an approximate 230% year-on-year improvement. By business segment, Packaging & Specialty Plastics (Dow’s core polyethylene business) served as the profit pillar, with segment EBIT rising $1.229 billion year-on-year; Industrial Intermediates also saw gross margin recovery; only the Performance Materials segment posted a modest profit decline due to major plant maintenance. From a cash flow perspective, operating cash flow stood at $1.324 billion in Q2 2026, versus a $470 million net outflow in Q2 2025—demonstrating that pricing gains were fully converted into operating cash. During the quarter, $503 million in restructuring expenses were accrued, supporting implementation of the ‘Transform to Outperform’ cost-reduction strategy. (II) BASF Group: Steady Core Growth + One-Time Asset Sale Gains Deliver Dual Boost BASF’s Q2 2026 sales totaled €17.2 billion, up €2.4 billion (+16.4% year-on-year); price increases contributed +11.5%, volume growth added +7.3%, while foreign exchange exerted a minor negative impact per preliminary commercial reporting. EBITDA excluding special items amounted to €2.4 billion—up €854 million year-on-year—with significant profit improvements across its Materials, Chemicals, and Industrial Solutions segments. The extraordinary profit surge stemmed primarily from a one-time asset disposal: the sale of its Coatings business to Carlyle Group generated €3.5 billion in after-tax proceeds, propelling the quarter’s after-tax profit to €4.2 billion and net profit to €4.1 billion—versus just €79 million in Q2 2025.

Dow’s Q3 2025 Financial Report (October 27, 2025)

After a full year of depressed stock performance—having fallen two tiers—the share price surged 13% following the Q3 2025 earnings release. Has there been any fundamental change? ・ First, revenue remains weak: the Q2 guidance for this quarter was $10.2 billion. ・ Second, GAAP EPS turned positive only due to two non-recurring items; operating profit failed to cover interest expenses. ・ On the positive side, the loss was narrower than expected, reflecting tangible progress in cost reduction and capital expenditure discipline. Has the chemical industry reached a cyclical downturn inflection point? ・ On supply: Dow believes capacity restraint is now underway across all regions—including China: “We’ve seen speculation about closures totaling approximately 13 million metric tons—comprising roughly 5 million tons of additional capacity in Asia, Japan, and Korea, and around 7 million tons in China driven by [anti-evolution] policies.” ・ On demand: Dow views overall demand as still weak—unchanged from last quarter—and hopes interest rate cuts will stimulate construction starts.

Dow declares quarterly dividend of 35 cents per share

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Dow Inc declared a quarterly dividend of 35 cents per share, marking its 461st consecutive payment since 1912. The payout is scheduled for December 11, 2026, for shareholders of record as of November 30.

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