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DOW ANNOUNCES HIGHER SALES AND LOWER EARNINGS

 DOW ANNOUNCES HIGHER SALES AND LOWER EARNINGS
 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


JG -- DE002 -- 3300 10/22/92 08:29 EDT
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