The second fiscal quarter of 2023 was a challenging one for materials supplier Dow Inc., with major decreases in sales, profit and operating earnings.
Sales for the quarter for Midland, Mich.-based Dow were down 27 percent vs. the same quarter in 2022 to $11.4 billion. In the same comparison, profit was down 70 percent to $501 million and operating earnings slid 63 percent to $885 million.
In a July 25 news release, Chairman and CEO Jim Fitterling said that in the second quarter, Dow "proactively navigated the challenging near-term macro environment by implementing our targeted cost savings actions." The firm also capitalized on its "advantaged feedstock position and participation in attractive end-markets," he added.
Second-quarter sales at Dow's Packaging & Specialty Plastics unit — including one of the world's largest polyethylene resin businesses —were down 28 percent to just over $5.9 billion, with operating earnings down 36 percent to $918 million. Officials cited lower selling prices for PE resin as a reason for the decline.
Dow's Industrial Intermediates & Infrastructure unit, which includes polyurethanes, saw sales fall 27 percent to less than $3.2 billion for the quarter. That unit posted a second-quarter operating loss of $35 million after showing operating earnings of $426 million a year ago. Officials cited lower demand from consumer durables, building and construction and industrial applications as reasons for the downturn.
Looking to the rest of the year, Fitterling said that Dow "will continue to execute our near-term cost savings actions and advance our longer-term strategic priorities, as we manage through a macro environment that is expected to remain challenging."
In late January, Dow announced that it would be cutting 2,000 jobs worldwide as part of a cost-savings plan, with 75 percent of those job cuts expected to be completed by the end of June.
Dow Chief Financial Officer Howard Ungerleider told Barron's July 25 that the firm "is bouncing along the bottom of a global industrial slowdown." But he added that inventory destocking "is basically done. … That gives you a little bit of hope for 2024."
Dow's per-share stock price was up more than 3 percent to $54.20 in early trading on July 25.