Dow Chemical Crushes Estimates (DOW)

Dow Chemical Co. DOW reported much better than expected fourth quarter results this morning, handily beating Wall Street estimates. The company earned 37 cents per share, or 47 cents excluding certain items. Revenue for the quarter came in at $13.77 billion. Wall Street analysts expected earnings of 34 cents per share on revenues of $12.48 billion. Andrew N. Liveris, Dow's chairman and chief executive officer, said, “This was a strong quarter for Dow and marked another significant milestone for our Company as we continued to deliver earnings growth. Broad-based sales increases and robust volume gains across the globe reflected the strength of our transformed business portfolio and wide geographic presence. We delivered record sales for both the quarter and the year in emerging markets, while our leadership positions in North America and Europe enabled us to capitalize on the economic recovery that appears to be gaining traction in those economies. “We are extremely pleased that we have achieved our seventh consecutive quarter of year-on-year margin expansion. This, coupled with record levels of equity earnings and $1.8 billion in cash from operations, demonstrates that Dow is firmly on its trajectory for earnings growth.” Regarding 2011, Liveris said “Dow is well-positioned for the improving economic climate and will continue to benefit from growth in high-margin sectors, such as electronics and packaging, driven by innovative products and technologies, coupled with our expanding presence in emerging markets. We demonstrated the success of our strategy over the course of 2010, as volume grew and margins expanded in our combined Performance segments, and our Basics businesses benefited from advantaged feedstocks in a much improved demand environment." Liveris went on to say, “Looking ahead, we expect growth will continue, driven by a broad range of leading end-markets in emerging geographies such as China, India, Eastern Europe and Brazil. Signs of improvement in industrial and B2B markets in North America and Europe give us optimism that we will see continued growth in these developed markets. Overall, the world continues to recover to pre-recession levels. However, with inflation concerns in emerging geographies, lingering unemployment issues in the United States and sovereign debt issues in Europe, we remain prepared for a reversal in momentum. Liveris concluded in the press release saying, “We have delivered a transformed portfolio that is increasingly targeted towards growth geographies, sectors and markets – while remaining well-balanced to mitigate against uncertainty. In addition to the Rohm and Haas acquisition, we have directly invested more than $5 billion over the last two years to address these growth opportunities and further strengthen our leadership positions. The Company's success will continue to be driven by our transformed business portfolio, our expanding presence in emerging geographies and our investments in innovations which are aimed at the intersection of the greatest societal needs and discontinuous business opportunities.”