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Dow ends 2021 on a strong note

Improved sales and profits for the largest US chemical maker could signal a bright earnings season for other chemical firms

by Alexander H. Tullo
January 27, 2022 | A version of this story appeared in Volume 100, Issue 4

Dow finished 2021 with improvement across all its businesses. The only obstacles to its performance were higher raw material prices and supply chain constraints, which will likely be headwinds noted by other chemical companies when they disclose results in the coming weeks.


Increase in Dow’s sales in 2021


Increase in Dow’s earnings in 2021.

For the year, Dow’s sales rose 42.6% from 2020—a year when the global economy was severely affected by COVID-19—hitting $55.0 billion. Earnings over the same period, excluding one-time charges, jumped 449%, to $6.8 billion.

Improvement in the fourth quarter was a little less dramatic. Sales for that period increased 34.2% from the same quarter in 2020, and earnings swelled 166%.

A couple of recent challenges were evident in Dow’s report. For example, its largest business, packaging and specialty plastics, saw a 3% decline in fourth-quarter sales volumes from a year earlier due to supply constraints in Asia. Operating earnings in the business slipped from the third quarter due to higher raw material and energy costs.

In a conference call with analysts, Dow chief financial officer Howard Ungerleider was optimistic about the start of 2022. Economic growth forecasts are above average. Globally, consumers saved $5 trillion during the pandemic and have pent-up desire for goods. Moreover, he expects that the Omicron variant of SARS-CoV-2 won’t change the path of economic recovery.

“With retail inventory remaining low and backlogs elevated, easing supply chain issues should unleash additional volume growth in 2022,” Ungerleider said.


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