Dow Chemical Whiffs on Earnings

Seth Jayson, The Motley Fool
Updated

Dow Chemical (NYS: DOW) reported earnings on July 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Dow Chemical missed estimates on revenue and whiffed on earnings per share.

Compared to the prior-year quarter, revenue contracted and GAAP earnings per share shrank significantly.


Gross margins increased, operating margins shrank, and net margins dropped.

Revenue details
Dow Chemical booked revenue of $14.51 billion. The 11 analysts polled by S&P Capital IQ anticipated revenue of $15.70 billion on the same basis. GAAP reported sales were 9.6% lower than the prior-year quarter's $16.05 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.55. The 16 earnings estimates compiled by S&P Capital IQ averaged $0.65 per share. GAAP EPS of $0.55 for Q2 were 35% lower than the prior-year quarter's $0.84 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 15.9%, 30 basis points better than the prior-year quarter. Operating margin was 7.7%, 30 basis points worse than the prior-year quarter. Net margin was 5.1%, 150 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $15.27 billion. On the bottom line, the average EPS estimate is $0.64.

Next year's average estimate for revenue is $60.33 billion. The average EPS estimate is $2.46.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,100 members out of 2,233 rating the stock outperform, and 133 members rating it underperform. Among 586 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 566 give Dow Chemical a green thumbs-up, and 20 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Dow Chemical is hold, with an average price target of $36.43.

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The article Dow Chemical Whiffs on Earnings originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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