Dow today announced the financial result for Q4, 2019 stating that net sales were $10.2 billion, down 15% versus pro forma results in the year-ago period, primarily driven by lower local prices in all operating segments due to a decline in global energy prices. 

Jim Fitterling, chief executive officer, commented on the quarter: “We experienced similar economic headwinds in the quarter as we have seen all year – especially in the industrial sector – which included price and margin compression, in part driven by additional industry supply and uncertain macros. Yet once again, the Dow team navigated these factors by leveraging our core strengths – feedstock flexibility, a lean cost structure, and leading positions in consumer-driven end-markets. Together, these enabled us to capture demand growth, excluding our Hydrocarbons & Energy business, while also delivering another yearover-year improvement in cash from operations. “We also deployed capital to strengthen our financial flexibility and to reward our owners, reducing debt by more than $1 billion and returning more than $600 million to shareholders. We enter 2020 in a stronger competitive and financial position, poised to continue to deliver value for our customers and shareholders.”

FINANCIAL HIGHLIGHTS:

• GAAP loss per share from continuing operations was $3.14; Operating EPS¹ was $0.78. Operating EPS excludes significant items in the quarter, totaling $3.92 per share, primarily related to: the impairment of the remaining Coatings & Performance Monomers acquisition-related goodwill and charges related to Sadara; integration and separation costs; and a tax gain associated with Swiss tax reform.

• Net sales were $10.2 billion, down 15% versus pro forma results in the year-ago period, primarily driven by lower local prices in all operating segments due to a decline in global energy prices.

• Volume declined 2% versus pro forma results in the year-ago period, primarily due to lower hydrocarbon co-product sales as a result of planned turnaround activity. Excluding the Hydrocarbons & Energy business, volume rose 2%, driven by demand growth in packaging and construction chemicals applications.

• Local price declined 12% versus pro forma results in the year-ago period. The largest declines were in Packaging & Specialty Plastics, driven by decreases in polyethylene and hydrocarbon co-products, and in Industrial Intermediates & Infrastructure, primarily due to polyurethane intermediates. Currency decreased sales by 1%.

• Equity losses were $21 million versus pro forma equity earnings of $26 million in the year-ago period. The reduction was primarily due to lower results at the Kuwait joint ventures, driven by margin compression in monoethylene glycol (MEG) and polyethylene.

• GAAP loss from continuing operations, net of tax, was $2.3 billion. Operating EBIT1 was $1.0 billion, down from pro forma results of $1.3 billion in the year-ago period, reflecting margin compression in Packaging & Specialty Plastics and Industrial Intermediates & Infrastructure. These factors were partly offset by margin expansion in Performance Materials & Coatings, savings from stranded cost removal, and the contribution from new polyethylene capacity on the U.S. Gulf Coast.

• Stranded cost removal in the quarter was more than $35 million, raising the full-year, cumulative stranded cost savings to more than $160 million. • Cash provided by operating activities – continuing operations was $1.9 billion, up $531 million versus the year-ago period. Capital expenditures in the quarter were $577 million and free cash flow2 was $1.3 billion.

• Returns to shareholders totaled $611 million in the quarter, including $517 million in dividends and $94 million in share repurchases. The Company achieved its full-year share repurchase target of $500 million.