uploads///Part  Earnings

Dow Chemical’s 2Q17 Earnings Beat Estimates

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Jul. 31 2017, Updated 10:48 a.m. ET

Dow Chemical 2Q17 earnings beat estimates

Dow Chemical (DOW) announced its 2Q17 earnings on July 27, 2017, before the market opened. It reported operating EPS (earnings per share) of $1.08, an increase of 13.7% on a year-over-year basis. In 2Q16, DOW reported operating EPS of $0.95. DOW managed to beat Wall Street expectations of $1.00 per share very convincingly. This quarter was the sixth time in a row that DOW managed to beat analysts’ expectations.

In this series, we’ll analyze DOW’s earnings details, revenue details, and segment performances.

 

The growth in DOW’s 2Q17 operating earnings per share was primarily driven by  the following factors:

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  • Higher volumes growth across all reporting segments and geographic regions helped DOW to post higher operating EPS.
  • The continued synergy from the DOW-Corning (GLW) stake takeover continued. As a result, DOW’s selling, general, and administrative (or SG&A) expenses as a percentage of sales reduced. DOW’s SG&A expenses in 2Q17 came in at $855 million, representing approximately 6.2% of the sales. In 2Q16, the SG&A expenses were reported at $787 million, representing approximately 6.6% of sales, a decrease of 40 basis points on a year-over-year basis.

Stock price reaction

DOW stock reacted positively to DOW’s strong 2Q17 earnings with a gain of 0.20% to close at $66.10. On the same day, DuPont rose 0.20%, while LyondellBasell (LYB) and Eastman Chemical (EMN) fell 0.90% and 0.05% respectively.

Investors can indirectly hold Dow Chemical by investing in the iShares U.S. Basic Materials ETF (IYM), which invests 12.1% in Dow Chemical as of July 27, 2017.

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