Midland, Michigan - Dow Chemical Co. has reported a profit increase for the third quarter (Q3) of 2008, but also said demand had decreased for its Dow Polyurethanes products, in a 23 Oct statement. Sales increased by 13 percent from Q3 in 2007 to $15400 million, whilst price increased 22 percent with double digit gains in all operating segments and all geographic areas. This was the company's largest year-over-year percentage increase in price since the first quarter of 2005, Dow said.
Dow's performance plastics segment reported that third quarter sales increased 10 percent to $4300 million compared to the same period in 2007. Price increased by 14 percent whilst volume declined 4 percent. The company reported that its PU segment, Dow Polyurethanes, suffered a decline in demand due to lagging selling prices, softening demand for furniture and bedding, increases in energy and raw material costs, the impact of Hurricanes Gustav and Ike, as well as further declining American automotive and housing markets in conjunction with softening demand in Europe and Asia Pacific.
However, Dow also said its Polyurethanes Systems unit reported continuing strong demand for oil and gas applications. Q3 earnings (EBIT) for performance plastics was $146 million compared with $409 million in Q3 2007, including $35 million hurricane-related costs.
Net income was up to $428 million from $403 million in 2007 and earnings per common share increased to $0.46 from $0.42 for the same period last year.
Volume was down 9 percent globally, suffering from the impact of Hurricanes Gustav and Ike and price increases. Excluding any acquisitions, divestitures and hurricane effect, volume decreased by 5 percent.
"Dow performed well in the third quarter despite a difficult economy and increased costs," said Andrew Liveris, Dow chairman and cfo. "Our ability to take proactive measures, including the implementation of two broad-based price increases and aggressive cost controls, allowed us to post solid results against worsening market conditions, record high raw material costs and two hurricanes on the US Gulf Coast."