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Dow results jump on economic recovery

Higher prices lifted the chemical company’s first-quarter sales and earnings

by Alexander H. Tullo
April 22, 2021 | A version of this story appeared in Volume 99, Issue 15

The first major chemical earnings announcement of 2021 is out, and it looks like a good sign for the industry. Profits at the largest US chemical maker, Dow, surged in the first quarter, and the company predicts a bright outlook for the remainder of the year as the economy continues to recover from the global pandemic.

First-quarter sales surge


Dow’s sales increase over the year-earlier quarter


Dow’s earnings increase over the year-earlier quarter

Source: Dow.

Dow’s sales were up 22% compared with the first quarter of 2020, when the economy was only beginning to feel the effects of COVID-19. Earnings excluding extraordinary items rose 133%.

Leading the charge was Dow’s packaging and specialty plastics segment, where sales jumped 32% from a year earlier. Volumes increased 5%, but the bigger story was selling prices, which increased 24%.

Dow’s industrial intermediates and infrastructure segment, which houses its polyurethanes business, also saw sales and earnings improvements. But volumes declined 6% because of the winter storm that snarled chemical production on the US Gulf Coast in February. Volumes also decreased in the performance materials and coatings segment.

CEO Jim Fitterling says Dow was able to bounce back from the storm relatively fast. “Our colleagues quickly and safely got our units back on line, some of which began coming up within a week of the storm,” he told analysts on a conference call April 22. “All impacted Dow units are back on line, and we reached prestorm operating rates by the end of March.”

Dow’s president and chief financial officer, Howard Ungerleider, sees a bright outlook for the rest of the year. “We do expect additional upside in continuing economic recovery in the industrial sector and as travel, workforce, and social activities resume,” he said.

The company used the occasion of its earnings to announce that it is partnering with the recycling firm Mura Technology, which uses supercritical steam to break down mixed plastic waste into naphtha and other hydrocarbons. Mura is building a 20,000-metric-ton-per-year plant in Teesside, England. Dow will convert output from Mura’s plants into chemicals and plastics.



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