Dow Chemical Exceeds 3Q Expectations

Dahlman Rose has published a research report on Dow Chemical Company DOW after the company released 3Q earnings results that greatly exceeded expectations. In the report, Dahlman Rose writes "Dow reported 3Q10 earnings of $0.54 surpassing our estimates of $0.35 and consensus of $0.41, driven by strength in its Basic segments. In 3Q10, the Basics Plastics grew adjusted EBITDA 24% y/y to $729 MM and Basics Chemicals reported EBITDA of $181 MM, which was a sizable increase vs our sequentially flat expectations. While the Performance Products segment grew adjusted EBITDA 44% y/y to $429 MM, driven by volume and margin improvements, Electronics and Specialty Materials, Coatings and Infrastructure, and Performance Systems units reported modest EBITDA growth of 5%, 6%, and 8%, respectively. We did note, however, that margins improved for most of their business segments, and our revised expectations assume that the company is able to retain at least some portion of these gains over our forecast period." Dahlman Rose maintains its Hold rating on Dow Chemical, which closed yesterday at $30.89.