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Dow Reports Fourth Quarter 2024 Results

On January 30, 2025, Dow Inc. (NYSE: DOW) announced its financial results for the fourth quarter of 2024. The report reflected a net sales figure of $10.4 billion, marking a 2% decrease from the previous year. Notably, the decrease was primarily influenced by the Packaging & Specialty Plastics segment, which experienced a decline in sales.

Financial Highlights

The company's sales showed a sequential drop of 4%, prominently affected by seasonal declines in the Performance Materials & Coatings sector. Year-over-year, Dow did see a 1% volume increase, largely due to gains across various regions, although there was a sequential volume drop of 1% driven by seasonal demand fluctuations in certain segments.

Interestingly, local prices fell 3% both year-over-year and sequentially, impacting all operating segments significantly. Equity losses noted during the period amounted to $51 million, which is down by $44 million from the same period last year, mainly attributed to lower integrated margins at joint ventures operating in Thailand.

Dow reported a GAAP net loss of $35 million or $0.08 per share, which included significant cost items totaling to $0.08, mainly involving restructuring. Operating earnings per share for this quarter stood at $0.00, affected by unexpected non-cash tax adjustments primarily tied to Argentina's inflation challenges.

The operating earnings before interest and tax (Op. EBIT) reached $454 million, which is a drop of $105 million from the previous year, and was mainly driven by lower pricing environments, which were somewhat offset by improved operational rates and reduced expenditures. Operating earnings have mirrored the broader market's challenges, emphasizing the ongoing efforts to streamline costs and optimize operations. Cash provided by operating activities during continuing operations was reported at $811 million, down from $1.6 billion in 2023, showcasing the need for continued focus on cash flow management.

Strategic Responses

CEO Jim Fitterling highlighted the persistent weak macroeconomic conditions yet praised the team for achieving their fifth consecutive quarter of year-on-year volume growth. He pointed out that to adapt to these circumstances, Dow has entered into definitive agreements to divest a minority stake in certain U.S. Gulf Coast infrastructure assets, potentially bringing in cash proceeds of up to $3 billion. This move represents a new business model aiming to foster operational efficiencies while enhancing financial flexibility.

In addition to asset divestments, Dow announced a strategic review of selected European assets and outlined measures to achieve targeted cost reductions of $1 billion. This evolution in operational strategy reflects a significant commitment to preserving Dow’s robust financial foundation amidst market pressures.

Segment Performance

Packaging & Specialty Plastics

For the Packaging & Specialty Plastics segment, net sales reached $5.3 billion, a 6% decline compared to the previous year. The local price decrease was recorded at 5%, driven by lower functional polymer and polyethylene prices due to declining demand. The operating EBIT for this segment was put at $447 million, representing a substantial decrease of $217 million year-over-year.

Industrial Intermediates Infrastructure

Net sales in this segment stood flat at $2.9 billion, with improved earnings compared to prior quarters, showing a promising turnaround in operational efficiencies.

Performance Materials Coatings

This segment saw net sales of $2 billion, recording a 4% increase year-over-year, however, experienced a significant drop sequentially due to seasonal demand shifts.

Looking Ahead

Reflecting on 2024's outcomes, CEO Fitterling expressed optimism, anticipating beneficial outcomes from various growth initiatives aimed at enhancing operational discipline for 2025. He noted the potential for further demand growth in packaging, energy, and electronic applications which remain critical end markets for Dow.

However, to adapt to the current economic landscape, the company will lower its 2025 capital expenditure plans by $300 to $500 million, alongside implementing further cost reduction measures. The proactive approach is essential for navigating uncertainties in the economic climate while focusing on long-term strategic priorities.

Dow will host a live webcast on its quarterly earnings conference call today at 8:00 a.m. ET, where further details and outlooks will be discussed. For more insights on their performance and future strategies, investors can access the presentation through their investor relations website.

Highlighting Dow’s commitment to sustainability and profitable growth, this report reflects both the challenges and opportunities in today’s volatile market landscape, as the company continues to transform operational capabilities to meet evolving customer demands.

About Dow

Dow Inc. operates as a leading materials science company and has established manufacturing sites across 30 countries, employing approximately 36,000 people. The company reported sales close to $43 billion in 2024, underscoring its position as a vital player in high-growth markets such as packaging, infrastructure, and mobility applications. More information about Dow can be accessed at www.dow.com.