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DOW'S EARNINGS HIGHER ON GAIN FROM DIVESTITURE

 MIDLAND, Mich., April 22 /PRNewswire/ -- The Dow Chemical Company (NYSE: DOW) today announced higher earnings in the first quarter of 1993 compared to a loss in the same period a year ago. The loss was the result of Dow adopting new accounting standards and subsequently restating earnings for the first three quarters of 1992. First quarter of 1993 earnings benefited from the sale of Dow's 50 percent interest in the Dowell Schlumberger group of companies. This transaction resulted in a pretax gain of $450 million or $1.00 per share.
 Sales for the first quarter were $4.4 billion, down 6 percent from $4.6 billion a year ago as the result of declines of 2 percent in prices and 4 percent in volume. Operating income was $388 million, down 23 percent from $504 million in the first quarter of 1992. Earnings per share of $1.47 were up from a loss of $2.17 for the same period a year ago. Before the cumulative effect of the accounting changes, Dow had earnings of 65 cents per share in the first quarter of 1992. Without the gain from the Dowell Schlumberger transaction, Dow's first quarter of 1993 earnings would have been 47 cents per share, down 28 percent from the previous year.
 "Earnings from operations in the first quarter were affected by a reversal in the strong growth of Consumer Specialties and further price erosion for basic plastics and chemicals in Europe," said Frank Popoff, Dow's chairman and chief executive officer. "On the other hand, our North American operations continued to improve."
 Chemicals and Performance Products had first quarter sales of $1.1 billion, unchanged versus a year ago, while operating income increased 66 percent to $146 million. Improvement in most businesses within this segment offset lower prices for caustic soda.
 Plastics had sales of $1.6 billion, down 2 percent for the first quarter compared to the same period in 1992. Operating income was up 4 percent to $87 million despite a significant drop in thermoplastic prices in Europe. The polyurethanes, styrenics and fabricated products businesses were responsible for the gain in operating income.
 Hydrocarbons and Energy had flat sales of $384 million and an operating loss of $7 million for the first quarter compared to a loss of $31 million a year ago.
 Consumer Specialties generated a 13 percent return on sales despite experiencing 15 percent lower sales. First quarter of 1993 sales were $1.3 billion and operating income was $162 million, a 52 percent decrease versus the same period a year ago.
 The most significant change from the first quarter of 1992 was Marion Merrell Dow reporting sharply lower sales and operating income. The declines were primarily attributed to lower U.S. sales of the Seldane family of antiallergy medications and the Nicoderm patch, two of the company's major prescription products. Other factors included sales of U.S. over-the-counter products now being recorded through Marion Merrell Dow's consumer products partnership, the impact of currency fluctuations on the company's international business, and the trend to negotiated and government-mandated price discounts and rebates.
 "We anticipate that the rest of the year will act as a transition to growth for Dow," Popoff said. "Our financial performance should improve as world economies strengthen and capacity rationalization reduces oversupply. We believe the industry is now at the bottom of the business cycle and should move upward from here."
 THE DOW CHEMICAL COMPANY AND SUBSIDIARIES
 Consolidated Statement of Income
 (Unaudited)
 In millions, except for share amounts
 Three Months Ended
 March 31, 1993 March 31, 1992
 Net sales $4,363 $4,639
 Operating costs and expenses
 Cost of sales 2,930 3,052
 Insurance and finance company
 operations, pretax expense (income) (43) (21)
 Research and development expenses 303 312
 Promotion and advertising expenses 169 192
 Selling and administrative expenses 579 564
 Amortization of intangibles 37 36
 Total operating costs and expenses 3,975 4,135
 Operating income (loss) 388 504
 Other income (expense)
 Equity in earnings of 20-50 percent
 owned companies 25 25
 Interest income 47 24
 Capitalized interest 16 19
 Interest expense (176) (184)
 Gain (loss) on foreign currency
 transactions (7) (15)
 Gain on sale of equity in Dowell
 Schlumberger (Note C) 450 ---
 Sundry income - net 8 8
 Total other income (expense) 363 (123)
 Income before provision for taxes on
 income and minority interests 751 381
 Provision for taxes on income 293 124
 Minority interests' share in income 56 79
 Net income before cumulative effect
 of accounting change 402 178
 Cumulative effect of accounting
 change (Note B) --- (765)
 Net income (loss) 402 (587)
 Preferred stock dividend 2 2
 Net income available for common
 stockholders $400 ($589)
 Average common shares outstanding 272.7 270.9
 Earnings per common share:
 Before cumulative effect of
 accounting change $1.47 $0.65
 Cumulative effect of accounting change --- ($2.82)
 Net earnings (loss) per common share $1.47 ($2.17)
 Cash dividends declared per common
 share $0.65 $0.65
 Depreciation $320 $322
 Capital expenditures $276 $285
 Notes to Financial Statements
 Note A: The unaudited interim financial statements reflect all adjustments (consisting of normal recurring accruals) which, in the opinion of management, are considered necessary for a fair presentation of the results for the period covered.
 Note B: The company adopted Financial Accounting Standards Board Statement Numbers 106 ("Employers' Accounting for Postretirement Benefits Other than Pensions") and 109 ("Accounting for Income Taxes") effective Jan. 1, 1992. Earnings for the first three quarters of 1992 have been restated as a result of these accounting changes.
 FAS 106 requires employers to recognize the cost of certain health care and life insurance benefits provided to retirees and their dependents as a liability during employees' active years of service. The cumulative effect of this accounting change was a charge against 1992 net income of $994 million.
 FAS 109 changes the method used to calculate and record the effects of income taxes in the financial statements. The company has adopted the new method in accounting for income taxes and now bases the amount of the deferred taxes payable or receivable on events recognized in the financial statements and on tax laws existing at balance sheet date. The cumulative effect of the accounting change for the adoption of FAS 109 was a credit to 1992 net income in the amount of $229 million.
 Note C: In January 1993, the company sold its 50 percent holding in the Dowell Schlumberger group of companies to Schlumberger Limited. The decision to sell the 50 percent equity was due to Dowell Schlumberger's business becoming less chemistry intensive and thus less dependent of Dow's technology and participation. The sale generated a pretax gain of $450 million.
 -0- 4/22/93
 /CONTACT: Doug Draper of The Dow Chemical Company, 517-636-2876/
 (DOW)


CO: The Dow Chemical Company ST: Michigan IN: CHM SU: ERN

ML -- DE002 -- 9176 04/22/93 08:31 EDT
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Date:Apr 22, 1993
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