Dow adjusted profit falls 60% but tops expectations, stock slips

Shares of Dow Inc. DOW, -2.70% slipped 0.6% in premarket trading Thursday, after the specialty chemicals company reported third-quarter profit and sales that fell from a year ago, as higher energy costs hurt margins, but still beat expectations. The company said it has outlined plans to cut costs by $1 billion in 2023 as the macroeconomic environment remains “dynamic.” Net income dropped to $760 million, or $1.02 a share, from $1.71 billion, or $2.23 a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of $1.11 was down 60% from a year ago but topped the FactSet consensus of $1.08. Sales declined 4.9% to $14.12 billion, but was well above the FactSet consensus of $13.06 billion, with all business segments beating forecasts. While sales fell, cost of sales increased 6.6% to $12.38 billion, as gross margin contracted to 12.3% from 21.7%. “Underlying demand remains resilient in the U.S., while high energy and feedstock costs are driving record inflation and impacting demand in the Eurozone, and ongoing lockdowns in China continue to pressure both consumer spending and infrastructure investments,” said Chief Executive Jim Fitterling. The stock has dropped 14.1% over the past three months through Wednesday, while the Dow Jones Industrial Average DJIA, -0.33% has lost 4.6%.