10-QPeriod: Q1 FY2024

DOW INC. Quarterly Report for Q1 Ended Mar 31, 2024

Filed April 26, 2024For Securities:DOW

Summary

Dow Inc. reported a net income of $516 million ($0.73 per diluted share) for the first quarter of 2024, a significant turnaround from a net loss of $93 million (-$0.13 per diluted share) in the same period last year. This improvement was driven by a 9% decrease in net sales to $10.8 billion, primarily due to a 10% decline in local prices, offset by a 1% increase in volume. The company benefited from lower raw material and energy costs, contributing to improved cost of sales as a percentage of net sales. While overall sales declined across all segments and regions, key segments like Industrial Intermediates & Infrastructure and Performance Materials & Coatings saw volume increases. The company also managed its balance sheet effectively, increasing its cash and cash equivalents to $3.7 billion and maintaining substantial liquidity of $13.5 billion. Dow Inc. continued its commitment to shareholder returns, repurchasing $200 million in stock and maintaining its quarterly dividend at $0.70 per share.

Financial Highlights

50 data points
Beta

Revenue

$10.77B

11.9% Gross Margin

Net Income

$513.00M

4.8% Net Margin

EPS (Diluted)

$0.73

Total Assets

$58.82B

Cash & Equivalents

$3.72B

Free Cash Flow

$464.00M

Financial Statements
Beta
Revenue$10.77B
Cost of Revenue$9.49B
Gross Profit$1.28B
SG&A Expenses$442.00M
Interest Expense$199.00M
Net Income$513.00M
EPS (Basic)$0.73
EPS (Diluted)$0.73
Shares Outstanding (Basic)704.50M
Shares Outstanding (Diluted)705.50M

Key Highlights

  • 1Dow Inc. returned to profitability with a net income of $516 million in Q1 2024, compared to a net loss of $93 million in Q1 2023.
  • 2Net sales decreased by 9% year-over-year to $10.8 billion, primarily driven by a 10% decrease in local prices, though volume increased by 1%.
  • 3Cost of sales as a percentage of net sales improved to 88.1% from 89.7% year-over-year, reflecting lower raw material and energy costs.
  • 4The company increased its cash and cash equivalents to $3.72 billion and maintained a total liquidity of $13.5 billion.
  • 5Dow Inc. repurchased $200 million of its common stock and maintained its quarterly dividend at $0.70 per share.
  • 6Capital expenditures increased to $714 million from $440 million in the prior year, with full-year 2024 capital spending expected to be around $3 billion, including the Fort Saskatchewan Path2Zero project.

Frequently Asked Questions

The return to profitability was primarily driven by a significant decrease in cost of sales, stemming from lower raw material and energy costs, as well as the positive impact of structural cost improvements. This more than offset the decline in net sales, which was largely due to lower pricing.

Dow Inc. maintained a strong liquidity position with $13.5 billion in total committed and available credit facilities and cash and cash equivalents of $3.72 billion at the end of the quarter. The company also issued $1.25 billion in senior unsecured notes. Long-term debt maturities are not significant until 2027, indicating a stable financial position.

Capital expenditures increased to $714 million in Q1 2024, and the company expects full-year 2024 capital spending to be around $3 billion. A significant portion of this investment is allocated to the Fort Saskatchewan Path2Zero project, which is expected to deliver organic growth and decarbonize a substantial portion of the company's global ethylene capacity.

Net sales declined across all segments, with Packaging & Specialty Plastics down 11%, Industrial Intermediates & Infrastructure down 11%, and Performance Materials & Coatings down 5%. However, Industrial Intermediates & Infrastructure and Performance Materials & Coatings saw volume increases. Operating EBIT improved in Performance Materials & Coatings and Corporate, while it decreased in Packaging & Specialty Plastics and Industrial Intermediates & Infrastructure, primarily due to lower selling prices.