The Dow Chemical Company (NYSE: DOW) reported fiscal first quarter results on Thursday which saw earnings comfortably beating Wall Street’s estimate, thanks mainly to robust demand for its crop and seeds protecting chemicals in Americas, offsetting the weakness in plastic business.
Shares climbed about 5.40% by afternoon trading.
The Midland, Michigan-based company, which is the leading U.S. chemical maker by sales, expects that strong demand for crops and seeds protecting chemicals will help driving up the growth in coming years, having already posted record sales growth across various product categories (agriculture science segment) in the recently concluded quarter. In addition, the Dow Chemical Company is also divesting from non-core business units, closing down facilities and slashing thousands of jobs worldwide as it looks to bolster its financials.
Sales at Dow Chemical’s agriculture science business, which focuses on seeds, chemicals and oils, climbed 14% in the fiscal first quarter while sales at plastic division declined 3% to $3.5 billion, mainly due to weakness in Europe.
Speaking to Reuters, Dow Chemical Company’s Chief Executive, Andrew Liveris said “Two-thirds of the increase in revenues and profit came from new (agricultural science segment) products. That will continue to set records for us this year, and the next several years.”
Sales volume in the Middle East, Europe and Africa slumped 10%, it was flat in Asia and North America while in Latin America it increased 6%.
For the quarter, the Company reported a net income of $550 million or 46 cents a share up from $412 million or 35 cents a share, in the year-earlier quarter.
Stripping out onetime items, earnings climbed to 69 cents a share. Revenue contracted 2% to $14.4 billion.
Analysts’ consensus estimate was for earnings of 61 cents a share on revenue of $14.88 billion, according to a data compiled by Thomson Reuters.
Dow Chemical Company’s rivals such as DuPont and Monsanto also benefited immensely due to strong demand for its crop protection crops in North America in the recent past as farmers look to increase yields after witnessing one the worst summer in decades, last year.
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