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DOW ANNOUNCES HIGHER SALES AND LOWER EARNINGS /REPEATING FOR POINTS NEEDED/

             DOW ANNOUNCES HIGHER SALES AND LOWER EARNINGS
               /REPEATING FOR POINTS NEEDED/
    MIDLAND, Mich., Oct. 22 /PRNewswire/ -- The Dow Chemical Company (NYSE: DOW) had higher sales but lower earnings for the third quarter of 1992 compared to the same period a year ago.
    Sales were $4.8 billion, up 6 percent from $4.5 billion in the third quarter of 1991.  Operating expense controls initiated in 1991 are continuing to yield benefits.  Operating income was $446 million, up
9 percent from $410 million a year ago.   However, increased financial expenses and a higher tax rate contributed to a decline in net income. Earnings per share of 53 cents were down 35 percent from third-quarter 1991 earnings of 82 cents per share.
    "The combination of a sluggish recovery in the U.S. economy, a severe slowdown in Europe and weak industry fundamentals globally have denied us the pricing flexibility to restore profit margins in basic chemicals and plastics," said Enrique C. Falla, Dow executive vice president.
    Chemicals and Performance Products sales were up 5 percent at $1.2 billion in the third quarter compared to $1.1 billion a year ago and operating income was up 18 percent to $117 million.  "Strengthening of prices for chlorinated derivatives led to most of the increase in operating income," Falla said.
    Sales for Plastics were $1.7 billion in the third quarter, up 4 percent vs. a year ago, and operating income was up 2 percent to $89 million vs. $87 million in 1991.  "Continued weak business conditions for Thermoplastics in Europe overshadowed that business' progress toward recovery," Falla said.
    Dow's Consumer Specialties segment continues to experience growth in sales and operating income.  Sales for the third quarter were up 10 percent at $1.4 billion and operating income was 13 percent higher at $233 million.  Most of the third-quarter sales increase was from Pharmaceuticals as this business had $883 million in sales, up 17 percent compared to the same period in 1991.  Consumer Products had a 1-percent increase in sales to $255 million and Agricultural Products at $279 million had flat sales.
    "Lackluster growth in the economies of the industrialized world will likely delay the expected recovery in basic chemicals and plastics, impeding Dow from regaining earnings momentum this year," Falla said. "During 1993, we expect a gradual recovery from the level of earnings in 1992."
               THE DOW CHEMICAL COMPANY AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF INCOME
           (Unaudited; in millions except for share amounts)
                            Three Months Ended       Nine Months Ended
                                 Sept. 30                 Sept. 30
                            1992          1991        1992        1991
    Net sales              $4,754        $4,502     $14,252     $14,244
    Operating costs
     and expenses
    Cost of sales           3,207         3,087       9,406       9,495
    Insurance and finance
     company operations,
     net (income)              13           (29)        (29)        (68)
    Research and
     development expenses     309           295         939         864
    Promotion and
     advertising expenses     185           179         572         529
    Selling and
     administrative expenses  559           529       1,712       1,613
    Amortization of
     intangibles               35            31         107          95
    Total operating costs
     and expenses           4,308         4,092      12,707      12,528
    Operating income          446           410       1,545       1,716
    Other income (expense)
    Equity in earnings of
     related companies         31            27          75          86
    Interest income            25            39          74          94
    Capitalized interest       23            22          60          73
    Interest expense         (192)         (159)       (575)       (507)
    Gain (loss) on
     foreign currency
     transactions             (13)            3         (19)         46
    Gain on Destec Energy public
     stock offering (Note B)  ---           ---         ---         213
    Sundry income - net        39            27          72          74
    Total other income
     (expense)                (87)          (41)       (313)         79
    Income before provision
     for taxes on income and
     minority interests       359           369       1,232       1,795
    Provision for taxes
     on income                140            95         481         562
    Minority interests'
     share in income           74            51         249         199
    Net income                145           223         502       1,034
    Preferred stock dividend    2             2           5           5
    Net income available for
     common stockholders     $143          $221        $497      $1,029
    Average common shares
     outstanding            272.1         270.6       271.5       270.4
    Earnings per
     common share           $0.53         $0.82       $1.83       $3.81
    Cash dividends declared
     per common share       $0.65         $0.65       $1.95       $1.95
    Depreciation             $332          $323        $978        $905
    Capital expenditures     $396          $476      $1,075      $1,378
    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:  Destec Energy, Inc. is a major independent power company that develops, builds and operates facilities that produce and sell electrical and thermal energy as well as synthetic fuel gas for use in energy production.  Until the first quarter of 1991, Destec Energy, Inc. was a 100-percent subsidiary of The Dow Chemical Company.  In March 1991, Destec Energy, Inc. completed an initial public offering at a price of $20 per share, which reduced the company's ownership of Destec Energy, Inc. to approximately 72.3 percent.  The proceeds to Destec Energy, Inc. from the IPO, after deduction for commissions and offering expenses, were $325 million.
    The company recorded a $213 million gain on the IPO in recognition of the net increase in value of The Dow Chemical Company's investment in Destec Energy, Inc.  Deferred tax expense was not provided for on this gain in recognition of the fact that the company has both the ability and the intention to postpone indefinitely any turnaround of this basis difference.
    -0-                        10/22/92
    /CONTACT:  Doug G. Draper of The Dow Chemical Company, 517-636-2876/
    (DOW) CO:  The Dow Chemical Company ST:  Michigan IN:  CHM SU:  ERN 1001 10-22-92 08:29 EDT JG -- DE002 -- 3452 10/22/92 10:44 EDT
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Date:Oct 22, 1992
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