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Market Welcomes Dow Chemical’s 4Q16 Results as It Beats Estimates


Jan. 31 2017, Published 10:23 a.m. ET

Dow Chemical’s 4Q16 revenue

Dow Chemical (DOW) reported its 4Q16 results before the market opened on January 26, 2017. DOW reported 4Q16 revenue of $13.0 billion, beating analysts’ estimate of $12.4 billion.

The company’s 4Q16 revenue reflected impressive growth of 14.7% on a year-over-year basis. This was the first time DOW’s revenue crossed $13.0 billion in eight quarters.

DOW’s revenue growth was primarily driven by two factors. The first was DOW’s complete takeover of the Dow-Corning business. The second was sales volume growth. The volume rise excluded the Dow-Corning impact.

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Stock price zooms

Dow’s strong performance is clearly reflected in its stock price gains. DOW stock rose 2.1% to close the day at $61.42. Dow had been consolidating in the range of $50–$55 for close to a year. With the help of a couple of good quarters, the stock touched a 52-week high of $61.73.

On January 27, 2017, DOW closed at $61.31. In 2016, DOW returned 11.2%, while its peers LyondellBasell (LYB), DuPont (DD), and Eastman (EMN) returned -1.3%, 10.2%, and 11.4%, respectively. In the same period, the broader market representative, the SPDR S&P 500 ETF (SPY), returned 9.6%.

1Q17 outlook

Dow Chemical expects its 1Q17 revenue to be in the range of $12.3 billion–$13.3 billion, an expected rise of 14.5%–23.8% year-over-year. This growth should be majorly driven by the contribution from the company’s Dow-Corning acquisition.

CEO Andrew Liveris said, “This was another strong quarter for our company, extending our streak of year-over-year earnings and volume growth – reaching 17 consecutive quarters of increases in operating EPS and 13 consecutive quarters of volume growth.”

In this series, we’ll discuss Dow Chemical’s 4Q16 earnings in detail. We’ll also look into DOW’s reporting segment’s performance in 4Q16 and analysts’ latest recommendations for the company.


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