Dow reports fourth quarter and full-year results

The Dow Chemical Company, a leading science and technology company, achieved sales of $13.8 billion in the fourth quarter of 2010, a 22 percent increase compared with the same period last year excluding the impact of divestitures. For the full-year 2010, Dow reported sales of $53.7 billion. Excluding divestitures, sales rose 26 percent during 2010 versus the prior year, with double-digit gains in all operating segments except Health and Agricultural Sciences, which rose 7 percent. Sales in the emerging geographies surpassed $16 billion in the year, setting an all-time record for the Company. 

Reported earnings for the quarter were $0.37 per share, compared with $0.08 per share in the same period last year. The Company earned $0.47 per share in the quarter, excluding certain items. This compares with earnings of $0.18 per share in the same quarter last year, excluding certain items. Dow reported full-year earnings of $1.72 per share, or $1.97 per share excluding certain items. Reported earnings for 2009 were $0.32 per share, or $0.63 per share excluding certain items and discontinued operations.

At a Company level, quarterly EBITDA excluding certain items rose $441 million, or 30 percent, to $1.9 billion, representing the highest fourth quarter EBITDA since 2007 and year-over-year EBITDA margin expansion for seven consecutive quarters. Annual EBITDA excluding certain items totaled $7.5 billion, a 36 percent improvement versus 2009 EBITDA on a pro forma basis.

Sales in Plastics were $2.9 billion, up 20 percent from the same quarter last year. Volume increased   4 percent, while price rose 16 percent. Plastics EBITDA for the quarter was $765 million, which includes a $5 million charge related to the Styron divestiture.

Sales in Performance Products were $2.7 billion, up 23 percent compared with the same quarter last year. Volume rose 11 percent and price rose 12 percent. Performance Systems sales were $1.6 billion, up 17 percent compared with the same quarter last year. Volume increased 9 percent and price was up 8 percent.

Equity earnings in the fourth quarter of 2010 were $313 million, an all-time quarterly record for the Company. This was led by strong performance from Dow Corning, MEGlobal and the Company’s joint ventures in Kuwait. The Company’s full-year equity earnings of $1.1 billion represent a 54 percent increase from the previous year, excluding certain items in 2009.

Commenting on the Company’s outlook, Dow Chairman and Chief Executive Officer, Andrew N. Liveris, said: “Dow is well-positioned for the improving economic climate and will continue to benefit from growth in high-margin sectors, such as electronics and packaging, driven by innovative products and technologies, coupled with our expanding presence in emerging markets. We demonstrated the success of our strategy over the course of 2010, as volume grew and margins expanded in our combined Performance segments, and our Basics businesses benefited from advantaged feedstocks in a much improved demand environment.”

“Looking ahead, we expect growth will continue, driven by a broad range of leading end-markets in emerging geographies such as China, India, Eastern Europe and Brazil. Signs of improvement in industrial and B2B markets in North America and Europe give us optimism that we will see continued growth in these developed markets. Overall, the world continues to recover to pre-recession levels. However, with inflation concerns in emerging geographies, lingering unemployment issues in the United States and sovereign debt issues in Europe, we remain prepared for a reversal in momentum.

“We have delivered a transformed portfolio that is increasingly targeted towards growth geographies, sectors and markets – while remaining well-balanced to mitigate against uncertainty. In addition to the Rohm and Haas acquisition, we have directly invested more than $5 billion over the last two years to address these growth opportunities and further strengthen our leadership positions. The Company’s success will continue to be driven by our transformed business portfolio, our expanding presence in emerging geographies and our investments in innovations which are aimed at the intersection of the greatest societal needs and discontinuous business opportunities.”

Markus Wildi, President, Dow Middle East added, “The Middle East market underwent an exceptional recovery in 2010 and Dow’s operations capitalized on the region’s positive economics trends: we progressed our Middle East manufacturing strategy, strengthened community and customer partnerships, and enhanced our solutions offering to regional customers.  Dow’s commercial activities have generated significant momentum in the marketplace, and we look forward to further developing relationships with partners and stakeholders to accelerate our growth in 2011 and beyond.”

Middle East highlights for 2010 include:

Manufacturing

Dow and Saudi Aramco announced the move of a proposed JV project from Ras Tanura to Jubail in the Eastern Province of Saudi Arabia. An investment decision is expected mid-year 2011.

Dow and Petrochemical Industries Company K.S.C (PIC) of Kuwait inaugurated the Greater EQUATE facility, an expansion of Dow and PIC’s successful 15-year joint venture.

Dow Formulated Systems and E.A. Juffali & Brothers signed a polyurethane business alliance.

Business Growth

Dow launched the Dow Advanced Materials Division (AMD), appointing Dr. Ilham Kadri General Manager, Middle East and Africa. With one of the most diverse specialties portfolios in the world, Advanced Materials aims to become the leading provider of technology-enabled specialty solutions in the region.

Innovation

Dow unveiled its vision for the proposed Middle East and Africa Research and Development (R&D) Center at the King Abdullah University of Science and Technology (KAUST), where initial research is expected to focus on water and water treatment technologies.

Social Investment

Dow announced a partnership agreement with ‘The en.v Initiative’ to support environmental conservation in Kuwait and encourage sustainable practices in the Kuwaiti community. The partnership includes the launch of ‘The Dow Marine Conservation Program’, which is mandated with preserving and protecting Kuwait’s marine environment, and includes the title sponsorship of REUSE 4.0, a leading regional sustainability and recycling platform.

The complete fourth quarter 2010 and full-year 2010 earnings statements are available at: http://www.dow.com/financial/earnings/2010/10q4earn.htm.