10-QPeriod: Q2 FY2024

DOW INC. Quarterly Report for Q2 Ended Jun 30, 2024

Filed July 26, 2024For Securities:DOW

Summary

Dow Inc. reported net sales of $10.9 billion for the second quarter of 2024, a 4% decrease compared to $11.4 billion in the second quarter of 2023. This decline was primarily driven by lower local prices across all segments and regions, partially offset by a 1% increase in volume. For the first six months of 2024, net sales were $21.7 billion, down 7% year-over-year. Net income available for common stockholders was $439 million ($0.62 per share) for the quarter, down from $485 million ($0.68 per share) in the prior year period. The company highlighted strategic initiatives including a planned divestiture of its flexible packaging laminating adhesives business and an acquisition to bolster its recycling capabilities. Despite the sales decline, Dow demonstrated operational resilience by improving its equity in earnings from nonconsolidated affiliates, largely due to better performance from its Kuwait and Sadara joint ventures. The company also continues to focus on cost improvements and structural cost initiatives, which contributed to stable or improved operating EBIT in segments like Industrial Intermediates & Infrastructure and Performance Materials & Coatings. Dow maintained a strong liquidity position with $3.34 billion in cash and cash equivalents and fully available committed credit facilities totaling $8.4 billion.

Financial Highlights

50 data points
Beta

Revenue

$10.91B

12.1% Gross Margin

Net Income

$436.00M

4.0% Net Margin

EPS (Diluted)

$0.62

Total Assets

$58.53B

Cash & Equivalents

$3.34B

Free Cash Flow

$836.00M

Financial Statements
Beta
Revenue$10.91B
Cost of Revenue$9.59B
Gross Profit$1.32B
SG&A Expenses$390.00M
Interest Expense$197.00M
Net Income$436.00M
EPS (Basic)$0.62
EPS (Diluted)$0.62
Shares Outstanding (Basic)703.80M
Shares Outstanding (Diluted)705.30M

Key Highlights

  • 1Net sales decreased by 4% to $10.9 billion in Q2 2024 compared to $11.4 billion in Q2 2023, driven by a 4% decrease in local prices, partially offset by a 1% increase in volume.
  • 2Net income available for common stockholders was $439 million ($0.62 per diluted share) in Q2 2024, down from $485 million ($0.68 per diluted share) in Q2 2023.
  • 3The company is undergoing strategic portfolio adjustments, including the announced divestiture of its flexible packaging laminating adhesives business and the acquisition of Circulus Holdings, a plastic waste recycler.
  • 4Operating EBIT for the Packaging & Specialty Plastics segment decreased by $215 million to $703 million in Q2 2024 compared to the prior year, mainly due to lower selling prices and reduced demand.
  • 5The Industrial Intermediates & Infrastructure segment saw its Operating EBIT improve to $7 million from a loss of $35 million in Q2 2023, driven by lower costs and improved joint venture performance.
  • 6Performance Materials & Coatings segment's Operating EBIT increased significantly to $146 million in Q2 2024 from $66 million in Q2 2023, primarily due to improved demand and higher operating rates.
  • 7Dow maintained a strong liquidity position, with cash and cash equivalents of $3.34 billion at June 30, 2024, and $8.4 billion in committed and available credit facilities.

Frequently Asked Questions

The primary driver for the 4% decrease in net sales was a 4% decline in local prices across all operating segments and geographic regions. While volume saw a slight increase of 1%, it was not enough to offset the impact of lower pricing. Unfavorable currency movements also contributed negatively by 1%.

Net income available for Dow Inc. common stockholders decreased to $439 million ($0.62 per share) in the second quarter of 2024, from $485 million ($0.68 per share) in the same period of 2023. This decline reflects the lower net sales and some segment-specific challenges, although cost management and improved joint venture performance provided some offset.

Dow announced two significant strategic moves. Firstly, it entered into a definitive agreement to sell its flexible packaging laminating adhesives business for approximately $150 million. Secondly, it signed an agreement to acquire Circulus Holdings, a U.S. company that recycles plastic waste into post-consumer resin, which supports Dow's circular economy goals.

Dow's management is focused on delivering sequential earnings improvements in the second half of the year, despite navigating a slower macro environment. They expect near-term demand to continue growing in many markets, though significant changes in building and construction and consumer durables are not anticipated in 2024. The company plans to leverage its innovation, global scale, and cost advantages to drive higher earnings and shareholder returns.