MIDLAND—Dow Inc. reported sharply higher net income on higher sales in the first quarter ended March 31.
Net income was $1.01 billion or $1.32 a million in the quarter, up from $258 million or 32 cents a share in the first quarter of 2020. Sales were $11.88 billion, up from $9.77 billion in the first quarter of 2020.
“Our results for the first quarter demonstrated the continued focus and agility of Team Dow, delivering top- and bottom-line growth sequentially and year-over-year,” Dow chairman and CEO Jim Fitterling said in a press release. “We swiftly responded to the unusual industry-wide disruption from Winter Storm Uri, quickly bringing assets back online within a week and reaching pre-storm operating rates by quarter-end. And despite supply constraints, we saw demand growth as the economic recovery continued to broaden, most notably in packaging, construction, mobility, electronics and consumer durables end-markets. We achieved sales growth and pricing gains in every operating segment, business and region. Combined with our continued cost discipline, these top-line results also supported margin growth both sequentially and year-over-year, as the recovery expanded across key end markets.”
Dow’s packaging and specialty plastics segment saw sales of $6.08 billion, up 32% from $4.6 billion a year earlier. Operating earnings before interest and taxes was $1.23 billion, up from $580 million a year earlier. Compared to the prior quarter the business delivered local price gains in all regions. Sequential volumes declined due to weather-related production outages.
Dow’s industrial intermediates and infrastructure business posted sales of $3.61 billion, up 18 percent from $3.05 billion a year earlier. Operating EBIT was $326 million, up from $175 million a year earlier. Polyurethanes and construction chemicals business achieved a double-digit net sales increase compared to the year-ago period, led by strong local price gains in polyurethanes. Resilient buying patterns in consumer durable goods and appliances and industrial end markets drove demand growth, which was more than offset by lower supply volumes in the U.S. Gulf Coast due to production outages and other third-party supply shortages related to Winter Storm Uri. The Industrial Solutions business achieved local price gains in offerings for coatings, industrial, and electronics end-market applications on strong supply/demand fundamentals and rising energy costs. Net sales were in line sequentially, as local price gains in all regions were offset by volume declines due to weather-related production outages.
Dow’s performance materials and coatings business hit sales of $2.12 billion, up from $2.07 billion a year earlier. Operating EBIT was $62 million, down from $162 million a year earlier. Consumer solutions business achieved higher net sales due to local price gains for siloxanes; robust demand for consumer, electronics and mobility applications; and positive impacts from currency. Sales gains were partially offset by planned maintenance in Asia Pacific. Sequentially, the business delivered local price gains across all regions. The business also achieved volume gains in all regions except Asia Pacific where strong demand in performance silicones were offset by planned maintenance in siloxanes. Coatings and performance monomers achieved higher net sales year-over-year driven by local price gains in all regions, and notably in acrylic monomers due to strong supply and demand fundamentals. Weather-related supply constraints due to Winter Storm Uri and planned maintenance more than offset continued strong demand for architectural coatings. Sequentially, the business experienced local price gains particularly in acrylic monomers due to increases in raw material costs. Typical seasonal demand recovery for coatings was more than offset by impact from the winter storm and planned maintenance.
“Dow entered the second quarter with increasing momentum,” said Fitterling. “We expect the broadening economic recovery, aided by vaccine distribution progress and tight market fundamentals, to continue to benefit our businesses. Our near-term incremental capital investments will further support growth across our consumer-led portfolio. With our differentiated feedstock flexibility, geographic scale, advantaged cost positions, top-quartile cash generation, and our leadership in high-growth end-markets, Dow is well positioned for continued value creation through 2021 and beyond.”
To listen to a replay of the webcast discussing these results, and view the slide presentation that accompany the conference call, visit investors.dow.com.