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DOW QUARTERLY EARNINGS IMPACTED BY SPECIAL CHARGE

 DOW QUARTERLY EARNINGS IMPACTED BY SPECIAL CHARGE
 MIDLAND, Mich., Jan. 30 /PRNewswire/ -- The Dow Chemical Company


(NYSE: DOW) today announced lower sales and earnings for both the quarter and year, reflecting the effect of a slowdown in the global economy, weak industry fundamentals and a special charge taken against fourth-quarter earnings.
 Sales for the fourth quarter of 1991 were $4.6 billion, down 11 percent versus a year ago. A one-time, special charge before taxes of $370 million was the cause for a net loss of $94 million or 35 cents per share for the quarter. Excluding the special charge at the average tax rate for the year, earnings were 54 cents per share. Net income in the fourth quarter a year ago was $273 million and earnings per share were $1.01. The special charge reflects asset write-offs and write- downs that follow the Dow management decision to permanently shut down and divest of a variety of facilities and business activities primarily in its basic segments.
 For 1991, sales were down 5 percent to $18.8 billion compared to the record $19.8 billion in 1990. Net income fell 32 percent from a year ago to $935 million. Net income includes a non-taxable gain of $213 million for the initial public sale of stock in Destec Energy, Inc., but this gain was offset by the $370 million special charge on an after-tax basis. Earnings per share in 1991 were $3.46, down 32 percent from 1990.
 "The fourth-quarter loss ends a very disappointing year in which pricing was our major challenge and accounted for about 90 percent of the profit reduction we experienced in 1991," said Frank Popoff, Dow president and CEO. Pricing affected by weak industry fundamentals declined 4 percent, impacting profits by about $800 million. Sales volume declined 1 percent due to a protracted recession in the U.S. economy.
 Chemicals and Performance Products had 11 percent lower sales and a 65-percent decline in profits for 1991 compared to a year ago as both volume and pricing were down. The most significant impact was in Chemicals and Metals, which had special charges for the completed or planned shutdown of some chlor-alkali and derivatives facilities. Performance Products had lower sales, but showed a 4-percent improvement in profitability.
 Plastic Products generated lower sales and profits compared to 1990 with an 8-percent and 50-percent decline, respectively. The large volume thermoplastics, including polyethylene and polystyrene, accounted for more than 75 percent of this drop in sales and profits. Fabricated Products had less than a 10-percent profit decline even though its principal market of building and construction remained weak throughout the year.
 Hydrocarbons and Energy had a drop in operating income of $386 million, which included a special charge for the decrease in the carrying cost of oil and gas properties in Canada and other oil related assets. Independent power producer Destec Energy, Inc., a publicly traded Dow subsidiary, reported a 16-percent increase in net income for the year.
 Dow's Consumer Specialties segment generated 57 percent of the company's operating income in 1991. "Years like 1991 demonstrate the value of diversifying our product mix into value-added specialties," Popoff said. "All three of our consumer specialty businesses posted higher earnings for the year, contributing to record earnings for this segment."
 For Consumer Specialties, operating income was $962 million, an increase of 16 percent. Sales were also higher, up 9 percent to $5.5 billion. Marion Merrell Dow announced an earnings-per-share increase of 20 percent in 1991. New products approved or launched during the year by Marion Merrell Dow were Seldane-D(R), Cardizem(R) Injectable, Cardizem(R) CD and Nicoderm(R). DowBrands and DowElanco also had improved earnings, reflecting better geographic and product mixes.
 "Pricing in 1991 was very poor and remains a challenge in 1992," Popoff said. "However, operating rates at 85 percent compare favorably with the 65-percent rate experienced during the 1982 recession, suggesting a quick return to acceptable margins once demand recovers."
 Popoff added, "We expect to see a resumption in our growth during 1992 and a return to positive earnings momentum in the second half of the year when global economies are expected to resume growth."
 THE DOW CHEMICAL COMPANY AND SUBSIDIARIES
 CONSOLIDATED STATEMENT OF INCOME
 (Unaudited; in millions)
 Three Months Ended 12 Months Ended
 Dec. 31 Dec. 31 Dec. 31 Dec. 31
 1991 1990 1991 1990
 Net sales $4,563 $5,147 $18,807 $19,773
 Operating cost
 and expense:
 Cost of sales 3,166 3,561 12,661 13,035
 Insurance and
 finance company
 operation, net
 expense (income) (27) (18) (95) (65)
 Research and
 development expenses 295 302 1,159 1,136
 Promotion and
 advertising expenses 192 157 721 639
 Selling and
 admin. expenses 568 568 2,181 2,084
 Amortization of
 intangibles 34 34 129 126
 Special charges 370 --- 370 ---
 Total operating costs
 and expenses 4,598 4,604 17,126 16,955
 Operating income (loss) (35) 543 1,681 2,818
 Other income (expense):
 Equity in earnings
 of related companies 32 28 118 143
 Interest income 34 33 128 123
 Capitalized interest 22 25 95 84
 Interest expense (197) (194) (704) (740)
 Gain (loss) on foreign
 currency transactions 24 9 70 56
 Gain on Destec public
 stock offering --- --- 213 ---
 Sundry income
 (expense) - net 13 30 87 79
 Total other income
 (expense) (72) (69) 7 (255)
 Income (loss) before
 provision for taxes on
 income and minority
 interest (107) 474 1,688 2,563
 Provision for taxes
 on income (loss) (52) 174 510 978
 Minority interests'
 share in income 37 26 236 201
 Net income (loss) (92) 274 942 1,384
 Preferred stock dividend 2 1 7 6
 Net income (loss)
 available for common
 stockholders ($94) $273 $935 $1,378
 Average common shares
 outstanding 270.7 269.9 270.5 269.9
 Earnings (loss)
 per common share ($0.35) $1.01 $3.46 $5.10
 Cash dividends declared
 per common share $0.65 $0.65 $2.60 $2.60
 Depreciation $401 $330 $1,306 $1,170
 Capital expenditures $530 $707 $1,908 $2,119
 -0- 1/30/92
 /CONTACT: Doug G. Draper of The Dow Chemical Company, 517-636-2876/
 (DOW) CO: The Dow Chemical Company ST: Michigan IN: CHM SU: ERN


ML-JG -- DE001 -- 5069 01/30/92 08:23 EST
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Date:Jan 30, 1992
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