Dow reports second quarter 2022 results

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Overig advies 21/07/2022 14:00
FINANCIAL HIGHLIGHTS
• GAAP earnings per share (EPS) was $2.26; Operating EPS1 was $2.31, compared to $2.72 in the year-ago
period and $2.34 in the prior quarter. Operating EPS excludes significant items in the quarter, totaling $0.05 per
share, primarily related to digitalization program costs.
• Net sales were $15.7 billion, up 13% versus the year-ago period with gains in all operating segments and
regions. Sequentially, sales were up 3% with gains in all regions except Asia Pacific, which was impacted by
pandemic-related lockdowns in China.
• Local price increased 16% versus the year-ago period, reflecting gains in all operating segments, businesses,
and regions. Currency decreased net sales by 3% year-over-year due to broad-based strength of the U.S.
dollar. Sequentially, local price increased 6% with gains in all operating segments and regions.
• Volume was consistent with the year-ago period, as gains in Packaging & Specialty Plastics were primarily
offset by declines in Industrial Intermediates & Infrastructure. Sequentially, volume declined 2%, driven by
declines primarily in Europe and China.
• Equity earnings were $195 million, down $83 million from the year-ago period, primarily due to impacts from
pandemic-related lockdowns in China. Equity earnings were up $21 million from the prior quarter, driven by
gains at Sadara.
• GAAP Net Income was $1.7 billion. Operating EBIT1 was $2.4 billion, down $453 million versus the year-ago
period. Gains in the Performance Materials & Coatings segment were more than offset by higher raw material
and energy costs across the company as well as lower equity earnings. Sequentially, operating EBIT decreased
2%, as gains in Packaging & Specialty Plastics were more than offset by declines in Industrial Intermediates &
Infrastructure.
• Cash provided by operating activities – continuing operations was $1.9 billion, down $165 million year-overyear and up $244 million compared to the prior quarter. Free cash flow1 was $1.4 billion.
• The Company’s proactive actions to redeem outstanding notes totaling $750 million have delivered an annual
interest expense reduction of $27 million and no substantive long-term debt maturities are due until 2027.
• Returns to shareholders totaled $1.3 billion in the quarter, comprised of $800 million in share repurchases and
$505 million in dividends.
SUMMARY FINANCIAL RESULTS
Three Months Ended June 30 Three Months Ended March 31
In millions, except per share amounts 2Q22 2Q21 vs. SQLY
[B / (W)] 1Q22 vs. PQ [B / (W)]
Net Sales $15,664 $13,885 $1,779 $15,264 $400
GAAP Income, Net of Tax $1,681 $1,932 $(251) $1,552 $129
Operating EBIT¹ $2,375 $2,828 $(453) $2,419 $(44)
Operating EBIT Margin¹ 15.2% 20.4% (520) bps 15.9% (70) bps
Operating EBITDA¹ $3,059 $3,573 $(514) $3,171 $(112)
GAAP Earnings Per Share $2.26 $2.51 $(0.25) $2.11 $0.15
Operating Earnings Per Share¹ $2.31 $2.72 $(0.41) $2.34 $(0.03)
Cash Provided by Operating
Activities – Cont. Ops $1,856 $2,021 $(165) $1,612 $244

1. Op. Earnings Per Share, Op. EBIT, Op. EBIT Margin, Op. EBITDA, and Free Cash Flow are non-GAAP measures. See page 6 for further discussion. ®TM Trademark of The Dow Chemical Company (“Dow”) or an affiliated company of Dow

CEO QUOTE
Jim Fitterling, chairman and chief executive officer, commented on the quarter:
“Team Dow once again delivered net sales growth both year-over-year and sequentially with price increases across
all operating segments and regions. Our competitive advantages and relentless focus on disciplined execution
enabled us to navigate the impacts of pandemic-related lockdowns in China, continued logistics constraints, and
higher energy and raw material costs. As a result, we increased our cash flow and our share buybacks sequentially.
“We continued to progress our strategy to grow our underlying earnings over the economic cycle by investing in
higher-return, faster-payback projects while capitalizing on long-term growth opportunities. As part of these efforts,
today we announced a series of circularity projects that will enable us to achieve approximately two thirds of our
2030 ‘Stop the Waste’ target as we capture growth for the sustainable and circular solutions our customers are
increasingly demanding.”

SEGMENT HIGHLIGHTS
Packaging & Specialty Plastics
Three Months Ended June 30 Three Months Ended March 31
In millions, except margin
percentages 2Q22 2Q21 vs. SQLY
[B / (W)] 1Q22 vs. PQ
[B / (W)]
Net Sales $8,233 $7,121 $1,112 $7,627 $606
Operating EBIT $1,436 $2,014 ($578) $1,234 $202
Operating EBIT Margin 17.4% 28.3% (1090) bps 16.2 % 120 bps
Equity Earnings $138 $130 $8 $110 $28

Packaging & Specialty Plastics segment net sales in the quarter were $8.2 billion, up 16% versus the year-ago period. Local price increased 14% year-over-year due to tight supply and demand balances, with gains in both businesses and in all regions. Continued strong end-market demand drove a 5% year-over-year volume increase, with gains in energy, infrastructure, and packaging applications. Currency decreased net sales by 3%. On a sequential basis, the segment delivered an 8% net sales increase, driven primarily by local price gains in both businesses and in all regions.

Equity earnings were $138 million, up $8 million compared to the year-ago period primarily due to the Sadara joint
venture. On a sequential basis, equity earnings increased by $28 million on gains at Sadara and the Kuwait joint ventures.
Operating EBIT was $1.4 billion, compared to $2 billion in the year-ago period, as price increases were more than offset by rapidly rising raw material and energy costs. Sequentially, Op. EBIT was up $202 million and Op. EBIT
margins increased by 120 basis points due to improved product mix and integrated margins which offset higher raw
material and energy costs, primarily in the U.S. & Canada.
Packaging and Specialty Plastics business delivered a net sales increase versus the year-ago period due to both
local price and volume gains. Prices increased across all key product chains, led by gains in functional polymers and volumes increased on strong demand growth in packaging end-markets and materials for renewable energy
applications. Sequentially, the business increased revenue on price gains in all regions, primarily in industrial, consumer, and food packaging applications.
Hydrocarbons & Energy business delivered a net sales increase compared to the year-ago period, driven primarily by higher local prices for olefins and aromatics. Sequentially, sales increased due to higher olefin prices with gains in Europe and the U.S. & Canada.

see & read more on
https://s23.q4cdn.com/981382065/files/doc_financials/2022/q2/2Q22_Dow_Earnings_News_Release.pdf



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