It was a somewhat unusual quarter for Dow Chemical
For the quarter, the Michigan-based company earned $941 million, or $0.99 a share, a dip from last year's comparable $973 million, or $1 a share. The analysts who follow the company had apparently been looking for a per-share number of about $0.94. Net revenue for the period was up 19% to $14.8 billion, vs. the $12.4 billion for the first quarter of 2007.
The earnings shortfall resulted largely from higher prices for oil and natural gas, the raw materials for a host of the chemicals products manufactured by the company. At the same time, Dow was affected somewhat by a slide in the demand for polypropylene, as consumers pulled in their horns on durables and housewares.
Looking at Dow's six primary operating segments, all achieved double-digit increases in sales, with hydrocarbons and energy leading the way at 34.3%. Not far behind were basic chemicals, basic plastics, and agricultural sciences, all of which topped 20% sales growth.
Geographically, it was more of the same, with all regions checking in with double-digit numbers. However, North America suffered a 2% volume slide.
According to CEO Andrew Liveris, the company's outlook continues to reflect "a strong international economy and a robust agricultural sector." Indeed more than two-thirds of Dow's revenue comes from outside the U.S.
Dow thus follows DuPont
For my money, Dow merits ongoing attention from Foolish investors. When its 11.6 times 2008 forward P/E is juxtaposed with its international spread and its 4.3% dividend yield, it appears to be a company deserving of a spot on all our watch lists.
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