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Dow Reports Second Quarter 2023 Results
July 25, 2023 | PRNewswireEstimated reading time: 2 minutes
Dow announces second quarter 2023 results.
Financial Highlights:
- GAAP earnings per share was $0.68; operating earnings per share (EPS)1 was $0.75, compared to $2.31 in the year-ago period and $0.58 in the prior quarter. Operating EPS excludes significant items in the quarter, totaling $0.07 per share, primarily related to costs associated with the Company's 2023 Restructuring Program.
- Net sales were $11.4 billion, down 27% versus the year-ago period. Declines in all operating segments reflected lower demand and prices due to slower macroeconomic activity. Sales were down 4% sequentially, as volume gains were more than offset by lower local prices.
- Volume decreased 8% versus the year-ago period, led by a 14% decline in Europe, the Middle East, Africa, and India (EMEAI). Sequentially, volume increased by 1%, driven by gains in Asia Pacific and Latin America.
- Local price declined 18% versus the year-ago period and 5% sequentially, with declines in all operating segments and regions due to lower demand and global energy and feedstock costs.
- Currency decreased net sales by 1% year-over-year and was flat sequentially.
- Equity losses were $57 million, compared to equity earnings of $195 million in the year-ago period, primarily driven by declines at Sadara. Equity losses were $48 million in the prior quarter. Sequentially, the earnings decline was primarily driven by lower product prices, reflecting the impact of a slow recovery in China.
- GAAP net income was $501 million. Operating EBIT1 was $885 million, down from $2.4 billion in the year-ago period, with declines in all operating segments primarily driven by lower local prices. Sequentially, Op. EBIT was up $177 million, primarily driven by Packaging & Specialty Plastics.
- Cash provided by operating activities – continuing operations was more than $1.3 billion, down $509 million year-over-year and up $816 million compared to the prior quarter. The Company delivered cash flow conversion1 of 98% on a trailing 12-month basis.
- Returns to shareholders totaled $743 million in the quarter, including $493 million in dividends and $250 million in share repurchases.
CEO Quote
Jim Fitterling, chair and chief executive officer, commented on the quarter:
"Team Dow delivered sequential earnings improvement and generated operating cash flow of more than $1.3 billion in the second quarter. We proactively navigated the challenging near-term macro environment by implementing our targeted cost savings actions while capitalizing on our advantaged feedstock position and participation in attractive end-markets. Year-to-date, we have returned nearly $1.4 billion to shareholders through our industry-leading dividend and share repurchases, reflecting our ongoing commitment to strong cash generation. Altogether, we remain well-positioned to execute our financial and operational playbook and advance our Decarbonize and Grow strategy to continue to create value for all our stakeholders."
Outlook
"Looking ahead, we will continue to execute our near-term cost savings actions and advance our longer-term strategic priorities as we manage through a macro environment that is expected to remain challenging in the second half of the year," said Fitterling. "The actions we outlined in January are on track to deliver $1 billion of cost savings this year and we continue to benefit from the solid financial position and focus on cash flow generation we have demonstrated since Spin. Additionally, our disciplined and balanced capital allocation priorities continue to support our Decarbonize and Grow, and Transform the Waste investments to deliver long-term value creation for our stakeholders."
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