Dow Chemical 1Q profit drops 97 percent

[April 30, 2009]  NEW YORK (AP) -- Dow Chemical posted a 97 percent drop in first-quarter profit on Thursday due to job cuts and a steep drop in sales, though results easily beat Wall Street expectations.

The company earned $24 million, or 3 cents per share, compared with $941 million, or 99 cents per share, a year earlier.

Excluding charges and other one-time items, Dow earned 12 cents per share during the period.

Sales fell 39 percent to $9.09 billion from $14.82 billion a year earlier.

Analysts polled by Thomson Reuters expected, on average, a loss of 21 cents per share on revenue of $11.69 billion. Analysts typically exclude one-time charges.

Shares jumped more than 10 percent, or $1.42, to $14.93 in premarket trading.

"Our positive earnings in this recessionary environment were the direct result of our rapid actions to reduce costs and tightly manage operations," said Andrew Liveris, Dow's chairman and chief executive officer.

The Midland, Mich.-based company posted a $19 million charge related to a restructuring plan announced late last year. Dow also recorded a $48 million charge related to its buyout of Rohm & Haas this year, and a $29 million charge related to its stake in Dow Corning.

Because Dow's chemicals are used in such a wide variety of products, from toys to packaging, the global economic downturn has hit the company especially hard.

Overall volumes declined 19 percent from the first quarter last year and prices fell 20 percent.

One bright spot was Dow's agriculture sector. Sales were up and volume increased 10 percent, though prices were flat.

But sales in the company's performance plastics division fell 39 percent to $2.4 billion and prices fell 11 percent.

Dow's automotive and building businesses reported substantial slow downs.

[Associated Press; By ERNEST SCHEYDER]

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