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DOW ANNOUNCES HIGHER SALES AND LOWER EARNINGS THAN PREVIOUS YEAR

 DOW ANNOUNCES HIGHER SALES AND LOWER EARNINGS THAN PREVIOUS YEAR
 MIDLAND, Mich., July 23 /PRNewswire/ -- The Dow Chemical Company (NYSE: DOW) had 1 percent higher sales but lower earnings for the second quarter of 1992 compared to the previous year as the company was affected by continued weak industry fundamentals, a downturn in business conditions in Europe and slower than expected economic recovery in the U.S.
 Sales for the second quarter of 1992 were $4.9 billion, up 1 percent from $4.8 billion a year ago. Operating income was $568 million, up
9 percent from $521 million in 1991. Earnings per share of 68 cents were down 21 percent from earnings of 86 cents per share a year ago. In the second quarter, Dow Corning took a pre-tax charge of $45 million for estimated future costs associated with its discontinued breast implant products that reduced Dow's earnings by about 5 cents per share.
 "Margin contraction due to lower prices and the European slowdown significantly influenced results for the second quarter," said Enrique C. Falla, Dow executive vice president. Sales for Dow Europe in the second quarter were $1.4 billion, down 4 percent from $1.5 billion for the same period a year ago while operating income declined 79 percent to $30 million from $141 million. Excluding earnings from Dow Europe's consumer specialty products, the area experienced an unprecedented loss for the quarter.
 In addition, Dow suffered three major, unplanned plant outages. Accidents resulted in temporary closures of polyethylene plants in Canada and Spain and of a styrene facility in the Netherlands. "While most of the damage was covered by insurance, these plant outages resulted in lost volume and higher unabsorbed fixed costs," Falla said.
 Chemicals and Performance Products sales were unchanged at $1.1 billion in the second quarter compared to a year ago and operating income was up 53 percent to $92 million. "While prices are continuing to soften for caustic soda, pricing is strengthening for chlorine and derivatives, and many other chemical product lines, which historically coincides with the initial phase of an economic recovery," Falla said.
 Sales for Plastics were $1.7 billion in the second quarter, unchanged versus a year ago, and operating income declined 18 percent to $113 million. "The margin restoration drive for basic plastics continues with price initiatives being implemented for most of our product lines," Falla said. "Thermosets and Fabricated Products have already improved over the same period a year ago."
 Hydrocarbons and Energy had $382 million in sales, which was 15 percent lower than a year ago, and an operating loss of $47 million largely due to plant turnarounds versus a loss of $40 million in the same period of 1991.
 Dow's Consumer Specialties segment again experienced strong growth in sales and operating income. Compared to the second quarter of 1991, salet increase in sales with $949 million for the quarter. Agricultural Products had $470 million in sales, unchanged from a year ago.
 "Our latest results are disappointing even though they are an improvement over the first quarter of the year, which could very well be our trough quarter," Falla said. "Earnings are still unfavorable when making year-to-year comparisons, and we do not expect to exceed 1991 results until sometime during the second half of this year. Earnings momentum in some of our businesses normally lags the economic recovery and the slowdown in Europe has added new challenge in our effort to return to year-to-year earnings growth."
 THE DOW CHEMICAL COMPANY AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited; in millions except for share amounts)
 Three Months Ended Six Months Ended
 June 30 June 30
 1992 1991 1992 1991
 Net sales $4,859 $4,794 $9,498 $9,742
 Operating costs
 and expenses
 Cost of sales 3,164 3,238 6,199 6,408
 Insurance and finance
 company operations,
 net (income) (21) (21) (42) (39)
 Research and
 development expenses 322 290 630 569
 Promotion and
 advertising expenses 195 192 387 350
 Selling and
 administrative expenses 595 544 1,158 1,084
 Amortization of
 intangibles 36 30 72 64
 Total operating costs
 and expenses 4,291 4,273 8,399 8,436
 Operating income 568 521 1,099 1,306
 Other income (expense)
 Equity in earnings of
 related companies 17 33 44 59
 Interest income 25 29 49 55
 Capitalized interest 18 25 37 51
 Interest expense (199) (164) (383) (348)
 Gain (loss) on
 foreign currency
 transactions 9 20 (6) 43
 Gain on Destec Energy
 public stock offering --- --- --- 213
 Sundry income - net 25 26 33 47
 Total other income
 (expense) (105) (31) (226) 120
 Income before provision
 for taxes on income and
 minority interests 463 490 873 1,426
 Provision for taxes
 on income 181 178 341 467
 Minority interests'
 share in income 96 79 175 148
 Net income 186 233 357 811
 Preferred stock dividend 1 1 3 3
 Net income available for
 common stockholders $185 $232 $354 $808
 Average common shares
 outstanding 272.1 270.5 271.3 270.3
 Earnings per
 common share $0.68 $0.86 $1.30 $2.99
 Cash dividends declared
 per common share $0.65 $0.65 $1.30 $1.30
 Depreciation $324 $299 $646 $582
 Capital expenditures $394 $494 $679 $902
 -0- 7/23/92
 /CONTACT: Douglas G. Draper of Dow Chemical, 517-636-2876/
 (DOW) CO: Dow Chemical Company ST: Michigan IN: CHM SU: ERN


DH-JG -- DE001 -- 2275 07/23/92 08:37 EDT
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Date:Jul 23, 1992
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