Dow Q1 Exceeds EPS, Faces Revenue Drop
Global materials science industry specialist Dow Inc. (NYSE:DOW) reported first-quarter 2025 earnings on Thursday, April 24, that topped analysts' consensus expectations. Adjusted earnings per share (EPS) of $0.02 surpassed analyst expectations of a $0.01 loss. Revenue of $10.4 billion came in slightly above the forecasted $10.24 billion but was down 3% from $10.8 billion in Q1 2024.
The results reflect resilience amid ongoing pricing pressures and rising costs, although significant hurdles remain.
| Metric | Q1 2025 | Analysts' Estimate | Q1 2024 | Change (YOY) |
|---|---|---|---|---|
| Adjusted EPS | $0.02 | ($0.01) | $0.56 | (96.4%) |
| Revenue | $10.43 billion | $10.24 billion | $10.77 billion | (3.1%) |
| Net income (loss) | ($290 million) | N/A | $538 million | N/A |
| Adj. operating EBIT | $230 million | N/A | $674 million | (66%) |
Source: Dow Inc. Note: Analysts' consensus estimates for the quarter provided by FactSet. YOY = Year over year. EBIT = Earnings before interest and taxes.
Business Overview
Dow stands at the forefront of the materials science industry, leveraging its vast manufacturing presence across 30 countries. The company's diverse portfolio spans key segments such as Packaging & Specialty Plastics, Performance Materials & Coatings, and Industrial Intermediates & Infrastructure. With a focus on high-growth markets including packaging, mobility, and consumer applications, Dow emphasizes innovation and sustainability as key drivers for its long-term success. Recent strategic initiatives in 2024 have revolved around advancing sustainability with an emphasis on circular economy solutions and reducing greenhouse gas emissions.
Quarterly Performance
The first quarter of 2025 brought mixed results amid market volatility and geopolitical uncertainties. Despite topping expectations, net sales fell 3% year over year, reflecting persistent pricing pressures across major segments. The company's operating EBIT also saw a significant decline to $230 million from $674 million in Q1 2024, attributed to lower pricing and rising energy costs.
The Packaging & Specialty Plastics segment noted a 2% revenue drop, although volume increased by 4% due to heightened licensing and hydrocarbon sales. Meanwhile, Industrial Intermediates & Infrastructure faced a 5% revenue decline and ended with an operating EBIT loss of $128 million, driven by high energy costs. Performance Materials & Coatings witnessed a 4% sales drop, yet managed an $8 million operating EBIT improvement given reduced fixed costs.
Amid these dynamics, Dow strategically delayed its Path2Zero ethylene complex project in Alberta, Canada, aligning spending with current market conditions. Additionally, it initiated cost-saving measures and capital expenditure reductions, contributing approximately $6 billion of total cash support. Such efforts reflect a strategic pivot towards navigating financial headwinds while maintaining focus on long-term goals.
A particular highlight in 2024 was Dow's successful completion of the sale of its flexible packaging laminating adhesive business to Arkema (OTC:ARKAY). The sale marked a notable advance in Dow's initiative to optimize its asset base strategically.
Looking Ahead
Looking forward, Dow aims to continue its disciplined execution strategy, as outlined by CEO Jim Fitterling. Dow is also dedicated to further expanding its strategic partnerships and enhancing its focus on sustainable solutions.
Investors are advised to monitor developments in pricing strategies, the impact of geopolitical factors, and sustainability advancements closely. As Dow fortifies its competitive position, its ability to navigate these challenges remains closely aligned with achieving long-term strategic objectives.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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