UPDATED — Dow Chemical Co. delivered modest sales growth in 2014, but the firm's profit took a tumble.
The Midland, Mich.-based plastics and chemicals giant rang up sales of almost $58.2 billion in 2014 — up almost 2 percent — but profit slid 20 percent to just over $1.4 billion.
“Our operating model of integration with geographic and market diversification showed its superiority during volatile commodity environments,” Chairman and CEO Andrew Liveris said in a Jan. 29 news release announcing fourth-quarter and full-year results for 2014.
Plastics-related business units generated almost two-thirds of Dow's sales in 2014. Its performance plastics unit — including a massive polyethylene business — saw sales grow more than two percent to $22.4 billion, even as its pretax profit dipped almost 2 percent to $4.4 billion.
Dow's performance materials & chemicals unit — including polyurethanes and epoxy — posted sales growth of 2 percent to $15.1 billion. That unit's pretax profit popped 10 percent to $2.2 billion. Dow officials said its PU business achieved record fourth-quarter sales on double-digit revenue growth, with gains in all regions.
Dow's fourth-quarter earnings before interest, taxes, debt and amortization (EBITDA) — excluding certain items — of $9.3 billion were the highest in company history, as was its fourth-quarter EBITDA of $2.4 billion. Performance plastics' fourth-quarter EBITDA of almost $1.2 billion was a record for that unit as well.
“Against the backdrop of ongoing macroeconomic, currency and energy market uncertainty, we continue to see positive underlying demand fundamentals,” Liveris added.
Dow also spent 2014 sparring with activist investor Third Point LLC, which had criticized Dow for alleged financial underperformance and had suggested splitting Dow into two separate public companies. In November, Dow and Third Point agreed to add four new directors to Dow's board this year.
On Wall Street, Dow's fourth-quarter results had the firm's per-share stock price up almost five percent to $45 in late trading Jan. 29. The price had been on a roller-coaster ride in 2014, bouncing between $42 and $55 in the last four months of the year.