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By Ernest Scheyder
Jan 31 Dow Chemical Co reported a
lower-than-expected adjusted profit on Thursday as international
demand for polyurethane and chlorine withered, especially in
China and Europe.
The earnings miss surprised both investors and analysts on
Wall Street, sending Dow Chemical shares down 4.9 percent in
afternoon trading to $32.92. Shares had dropped as much as 6
percent earlier in the day.
For the fourth quarter, the company's net loss widened to
$716 million, or 61 cents per share, from $20 million, or 2
cents per share, in the year-earlier quarter.
Excluding one-time items, the company earned 33 cents during
the quarter. By that measure, analysts expected 34 cents per
share, according to Thomson Reuters I/B/E/S.
Sales fell 1 percent to $13.92 billion. Analysts expected
sales of $13.69 billion.
Sales of chlorine were hurt by repairs and shutdowns to
production facilities of Dow Chemical, the world's largest
Results were especially weak for polyurethane foams,
coatings and paints, and electronic materials.
The sharpest drop in volume, the physical amount of product
sold, was in Europe, which drained overall results.
"Weak volumes in Europe definitely held them back," Deutsche
Bank analyst David Begleiter said of Dow Chemical's results.
Dow Chemical's sales of electronic parts to solar panel and
smartphone makers also disappointed. While sales rose 3 percent
in the electronics unit, pricing fell 4 percent, implying the
company cut prices to simply move product.
"It's just generally a weak electronics market," Alembic
Global Advisors analyst Hassan Ahmed said.
Among its markets, China was particularly a weak spot in
"the second half of 2012," Dow Chemical Chief Executive Andrew
In an interview on the CNBC cable news channel early
Thursday, Liveris said he expected sales in China to improve in
In a bid to reassure investors, Liveris said on a conference
call that Dow Chemical would continue to rein in costs and boost
"The Dow (Chemical) team understand its priorities, which
are clear, and we know what needs to be done," he said.
Dow Chemical took a $990 million charge in the quarter, part
of a plan announced in October to lay off 5 percent of its
workforce, close 20 plants and write down the value of its
underperforming lithium-ion battery business.
(Editing by Jeffrey Benkoe and Bernadette Baum)