On January 30, 2025, Dow Inc (DOW, Financial) released its 8-K filing detailing the financial results for the fourth quarter of 2024. Dow Inc, a leading global chemicals producer, reported a net sales decline of 2% year-over-year to $10.4 billion, missing the estimated revenue of $10,511.02 million. The company also reported a GAAP net loss of $35 million, or $0.08 per share, which fell short of the estimated earnings per share of $0.21.
Company Overview
Dow Inc, formed in 2019 from the DowDuPont merger, is a diversified chemicals producer. It is a leading manufacturer of chemicals such as polyethylene, ethylene oxide, and silicone rubber, with applications across consumer and industrial markets.
Performance and Challenges
Dow Inc's performance in Q4 2024 was impacted by weak macroeconomic conditions, leading to a 4% sequential decline in net sales. The company faced challenges in its Packaging & Specialty Plastics segment, with net sales down 6% year-over-year due to lower functional polymers and polyethylene prices. Additionally, local prices decreased by 3% across all operating segments, contributing to the financial strain.
Financial Achievements
Despite the challenges, Dow Inc achieved a 1% increase in volume compared to the previous year, with gains in most regions. The company also managed to deliver returns to shareholders totaling $492 million in dividends during the quarter. These achievements highlight Dow Inc's resilience in maintaining shareholder value amidst challenging market conditions.
Key Financial Metrics
Dow Inc reported an Operating EBIT of $454 million, down $105 million year-over-year, primarily due to lower prices. The company's cash provided by operating activities from continuing operations was $811 million, a significant decrease from the previous year, primarily due to a prior period working capital release from destocking.
| Metric | Q4 2024 | Q4 2023 | Change |
|---|---|---|---|
| Net Sales | $10.4 billion | $10.6 billion | -2% |
| GAAP Net Loss | $(35) million | $(95) million | Improved |
| Operating EBIT | $454 million | $559 million | -19% |
| Operating Earnings Per Share | $0.00 | $0.43 | -100% |
Segment Highlights
The Packaging & Specialty Plastics segment reported a 6% decline in net sales year-over-year, driven by lower polyethylene prices. The Industrial Intermediates & Infrastructure segment remained flat in net sales compared to the previous year, while the Performance Materials & Coatings segment saw a 4% increase in net sales, driven by volume gains.
Analysis and Commentary
Jim Fitterling, chair and chief executive officer, commented on the quarter: "Despite persistently weak macroeconomic conditions, Team Dow delivered our fifth consecutive quarter of year-over-year volume growth, leveraging our cost-advantaged footprint to capture resilient demand for high-value applications."
Dow Inc's strategic initiatives, including the sale of a minority stake in U.S. Gulf Coast infrastructure assets and a strategic review of European assets, are expected to provide financial flexibility and operational efficiencies. The company's focus on cost reductions and maintaining a strong financial foundation is crucial for navigating the current economic downcycle.
Overall, Dow Inc's Q4 2024 results reflect the challenges faced by the chemicals industry, with declining prices and macroeconomic pressures impacting financial performance. However, the company's strategic actions and commitment to shareholder returns demonstrate its resilience and adaptability in a challenging market environment.
Explore the complete 8-K earnings release (here) from Dow Inc for further details.
