Dow Chemical’s Infrastructure Solutions segment’s performance

Dow Chemical’s (DOW) Infrastructure Solutions segment reported revenue of $2.5 billion in 1Q17, a 58.4% rise year-over-year compared to $1.6 billion in 1Q16. The segment accounted for 19.1% of DOW’s total revenue compared to 14.9% in 1Q16, representing a rise of 4.2 percentage points year-over- year.

Dow Chemical’s Infrastructure Solutions Segment: High 1Q17 EBITDA

DOW’s Infrastructure Solutions segment reported operating EBITDA (earnings before interest, tax, depreciation, and amortization) of $511.0 million in 1Q17, a 74.4% rise year-over-year compared to $293.0 million in 1Q16. The segment’s operating margin also rose 20.2% in 1Q17 compared to 18.4% year-over-year, representing a margin growth of 180 basis points.

Driving factors

Volumes across all businesses in this segment rose. The primary driver is mainly due to the inclusion of the silicone business as part of the integration of the Dow-Corning (GLW) acquisition. Strong volume growth from styrofoam insulation and BLUEDGE polymeric flame retardant. The coating materials business volumes also rose, driven by growth in Asia-Pacific for architectural coatings.

Segment’s outlook

The Infrastructure Solution silicone business will continue to drive growth. The synergy effect from the Dow-Corning integration will drive the segment’s EBITDA.

You can indirectly hold Dow Chemical by investing in the ProShares Ultra Basic Materials (UYM), which has invested 8.0% of its portfolio in Dow Chemical. The other top holdings of the fund include DuPont (DD), Monsanto (MON), and Praxair (PX) with weights of 7.9%, 5.8%, and 4.0%, respectively, as of April 27, 2017.

In the next part, we’ll analyze the performance of Dow Chemical’s Performance Materials & Chemicals segment in 1Q17.

Latest articles

Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.

The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.

Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.

Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.

14 Jun

IEA Again Slashes Its Oil Demand Growth Estimate

WRITTEN BY Rabindra Samanta

As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.

Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.