#Midland #earnings report #Dow Chemical #Q4 2025

Dow Chemical's 2025 Fourth Quarter Financial Results

In a recent announcement, Dow Chemical Company (NYSE: DOW) shared its financial highlights for the fourth quarter of 2025, revealing a challenging period for the company. The net sales for the quarter amounted to $9.5 billion, reflecting a 9% decrease year-over-year, as all segments experienced declines. This downward trend was further accentuated by a 5% sequential drop in sales, attributed largely to local pricing and volume reductions consistent with typical seasonal fluctuations.

Detailed Breakdown of Performance

The company reported a 2% volume decrease year-over-year, particularly in its Packaging and Specialty Plastics segment. This decline was mainly driven by reduced merchant olefins sales, particularly in EMEAI (Europe, the Middle East, Africa, and India), due to the idling of a regional cracker. In sequential terms, the volume also decreased by 2%, reflecting seasonal downturns across construction-related activities.

Pricing dynamics were also unfavorable, as local prices fell by 8% compared to the previous year, with a 3% sequential decrease. This situation was reflected in a GAAP net loss of $1.5 billion, with operating EBIT at only $33 million, marking a decline of $421 million from the same period last year. The vast majority of this decline was linked to price declines and reduced operating rates, even with some mitigation from cost reduction strategies implemented by the company.

Yearly Performance Overview

For the entirety of 2025, Dow reported a total net sales figure of $40.0 billion, alongside a significant GAAP net loss of $2.4 billion, which starkly contrasts from a profit of $1.2 billion recorded in 2024. Operating EBIT showed a decline to $0.4 billion from $2.6 billion the previous year. A notable drop in cash provided by operating activities was observed, dropping to $1.1 billion from $2.9 billion in 2024, further spotlighting the financial headwinds facing the company.

Segmented Analysis

Packaging and Specialty Plastics

In the Packaging and Specialty Plastics segment, net sales fell to $4.7 billion, indicating a 11% decline year-over-year. This decline was driven by a 9% reduction in local prices and a similar drop in volumes. Despite these challenges, there was a notable increase in licensing revenue, which somewhat offset the adverse impacts from lower downstream polymer prices.

Industrial Intermediates and Infrastructure

The Industrial Intermediates segment experienced a net sales decrease to $2.7 billion, with operating EBIT showing a significant loss of $201 million, a dramatic shift from profitability in the previous year. The decline was mainly influenced by lower integrated margins in key areas.

Performance Materials and Coatings

The Performance Materials and Coatings segment reported net sales of $1.9 billion, which marked a 6% drop relative to the previous year. The segment faced challenges related to lower demand across several applications contributing to this downturn.

Management Response and Strategic Outlook

Dow's CEO, Jim Fitterling, expressed ongoing commitment to the company's transformation and cost-reduction initiatives amidst the downturn. According to Fitterling, efforts under the