Dow swings to profit as revenues surge

- Last updated on GMT

Related tags: Dow, Generally accepted accounting principles

Dow said that increased demand for its products lifted
fourth-quarter sales by 20 per cent to $8.3 billion (€6.67bn), well
ahead of analysts' consensus estimates of $7.88 billion.

The company also posted a net profit of $929 million, or $0.99 a share, a reversal of its fortunes in the last quarter of 2002 when it reported a loss of $809 million (-$0.89 per share), although in 2002 the company took a $0.71 charge relating to merger costs and asbestos liabilities.

Net profit also included a tax benefit of $454 million, which added $0.49 to Dow' EPS.

Dow said the performance was driven by volume increases (+8 per cent), improved pricing (+12 per cent) and cost-cutting, particularly in sales, administration and R&D which were trimmed by 14 per cent. Structural costs at the group were reduced by $600 million in the full year.

"Dow's results benefited from a strengthening global economy and, more importantly, from Dow's focus on price/volume management and productivity improvements,"​ said chief executive William Stavropoulos.

For the full-year, sales rose 18 per cent to $32.6 billion, while net income came in at $1.7 billion, compared to a loss of $338 million in 2002.

Looking ahead to 2004, Dow estimated that its feedstock and energy costs will be $300 million higher in the first quarter than in the same period a year ago.

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