10-QPeriod: Q3 FY2022

DOW INC. Quarterly Report for Q3 Ended Sep 30, 2022

Filed October 21, 2022For Securities:DOW

Summary

Dow Inc. reported net sales of $14.1 billion for the third quarter of 2022, a 5% decrease from $14.8 billion in the third quarter of 2021. This decline was driven by a 4% decrease in volume and a 4% unfavorable currency impact, partially offset by a 3% increase in local prices. Net income available for common stockholders significantly decreased to $739 million ($1.02 per share) from $1,683 million ($2.23 per share) in the prior year's quarter. This was largely attributed to margin compression resulting from higher energy costs, particularly in Europe. Despite the quarterly dip, year-to-date sales showed an 11% increase to $45.0 billion, with a 16% rise in local prices more than compensating for a 1% volume decrease and a 4% unfavorable currency impact. The company repurchased $800 million of its common stock in the third quarter and continues to focus on cost savings initiatives and strategic growth investments, aiming for over $1 billion in cost savings in 2023.

Financial Highlights

52 data points
Beta

Revenue

$14.12B

12.3% Gross Margin

Net Income

$735.00M

5.2% Net Margin

EPS (Diluted)

$1.02

Total Assets

$59.56B

Cash & Equivalents

$2.32B

Free Cash Flow

$1.94B

Financial Statements
Beta
Revenue$14.12B
Cost of Revenue$12.38B
Gross Profit$1.73B
SG&A Expenses$356.00M
Interest Expense$155.00M
Net Income$735.00M
EPS (Basic)$1.03
EPS (Diluted)$1.02
Shares Outstanding (Basic)714.30M
Shares Outstanding (Diluted)718.10M

Key Highlights

  • 1Q3 2022 net sales decreased 5% year-over-year to $14.1 billion, primarily due to lower volumes and unfavorable currency movements.
  • 2Net income available for common stockholders fell 56% to $739 million ($1.02/share) in Q3 2022, down from $1,683 million ($2.23/share) in Q3 2021.
  • 3Year-to-date net sales increased 11% to $45.0 billion, driven by strong price increases.
  • 4Operating EBIT for the nine months ended September 30, 2022, was $5,989 million, a decrease from $7,268 million in the same period last year.
  • 5The company repurchased $800 million of common stock in Q3 2022 and has approximately $2.175 billion remaining under its new share repurchase authorization.
  • 6Dow Inc. declared a quarterly dividend of $0.70 per share, reflecting its commitment to shareholder returns.
  • 7The company is focused on delivering over $1 billion in cost savings in 2023 and advancing its decarbonization and growth strategy.

Frequently Asked Questions

The primary reason for the decrease in net income available for common stockholders was margin compression, largely due to higher energy costs, particularly in the EMEAI region, which impacted profitability.

In the third quarter of 2022, net sales decreased 5% year-over-year due to lower volumes and unfavorable currency. However, for the first nine months of 2022, net sales increased 11% year-over-year, driven by significant price increases that more than offset volume and currency impacts.

Dow Inc. is focused on advancing its decarbonization and grow strategy. They have outlined actions to deliver over $1 billion in cost savings in 2023 and are investing in higher-return projects to extend competitive advantages and maintain industry leadership.

Dow Inc. continues to return capital to shareholders through dividends and share repurchases. They declared a quarterly dividend of $0.70 per share and repurchased $800 million of common stock in the third quarter of 2022, with a substantial amount remaining on their current repurchase authorization.