Ahead Of Dow Chemical Q4 Results

(RTTNews) - Dow Chemical Company (DOW) has been successful in repositioning its portfolio to growth markets with clear integration and technology differentiation. Looking ahead, the company believes the market outlook favors the products, technologies and geographic position of the Dow portfolio.

The company also expects ongoing expansion of growth opportunities that will enable Dow to continue to capture that growth, mostly in markets such as China, the United States and Europe, despite challenges in soft pockets around the world, such as those in Brazil. Moreover, it anticipates strength in construction, packaging and transportation markets, as well as, in electronics, as the interconnectivity of the world continues to increase and Dow is well-positioned to manage, and in fact, win from the weakness in agriculture.

Dow's forecast indicate that there will be gradual recovery in the oil markets. And gas-based cracking will continue to be advantage. Amid these factors, the company's new investments on the U.S. Gulf Coast and in Saudi Arabia are coming online at exactly the right time, further boosting Dow's ability to capture and expand margins.

The company is slated to release its fourth-quarter results before the bell on Tuesday, February 2, with analysts polled by Thomson Reuters estimating earnings of $0.70 per share and revenue of $11.20 billion. Analysts' estimate typically exclude certain special items.

During its third-quarter earnings call, the company said its fourth quarter will be impacted by divestitures, mainly AgroFresh, Angus, Sodium Borohydride and Dow Chlorine Products in three material ways.

The company expects fourth-quarter revenue to be lower by between $1.3 billion and $1.8 billion.

In the previous quarter, the company reported net income available to common shareholders of $1.29 billion or $1.09 per share compared to $852 million last year.

Net sales declined to $12.0 billion from $14.4 billion generate a year ago. Adjusted sales totaled $11.9 million from $14.3 billion last year. Sales decline was due to pricing and currency.

Andrew Liveris, Dow's chairman and chief executive officer, said, "Dow's three years of consistent earnings growth demonstrates clearly that we have built a portfolio that captures growth where growth exists. In the forthcoming quarters we will continue to see growth and capture that growth in markets such as China, the U.S. and Europe, despite challenging macros in other parts of the world, such as Brazil."

DuPont Merger

EI DuPont De Nemours & Co. or DuPont (DD) and Dow Chemical in December said their boards of directors have unanimously approved an agreement for an all-stock merger of equals. The combined company will be named DowDuPont. Dow and DuPont shareholders will each own about 50% of the combined company

Andrew Liveris, president, chairman and CEO of Dow, will be the executive chairman of DowDuPont, while Edward Breen, chairman and CEO of DuPont will be the CEO. DowDuPont will be dual headquartered in Midland, Michigan and Wilmington, Delaware.

The companies said the combination will be highly synergetic and will result in a company with around $130 billion of market capitalization. The combination will result in market value of $30 billion, cost synergies will be about $3 billion and growth synergies will be around $1 billion.

Initially DuPont and Dow will merge its agriculture, material science and specialty products and subsequently pursue a tax-free spin-off into three independent, publicly traded companies in 18-24 months after closing of the merger.