Dow has reported a strong rise in sales, earnings during fourth quarter of 2021.
Company's GAAP earnings per share (EPS) was $2.32. Operating EPS1 was $2.15, compared to $0.81 in the year-ago period. Operating EPS excludes certain items, totaling $0.17 per share, primarily due to certain tax-related items.
Net sales were $14.4 billion, up 34% versus the year-ago period, with improvement in every operating segment, business and region. Sequentially, net sales were down 3% primarily driven by decreased polyethylene volume due to supply constraints as well as lower olefin and co-product prices.
Local price increased 39% versus the year-ago period, reflecting gains in all operating segments, businesses and regions. Sequentially, price increased 1% with gains in Performance Materials & Coatings and Industrial Intermediates & Infrastructure, led by industrial, construction and personal care applications along with continued tightness in siloxane supply.
Volume decreased 4% versus the year-ago period and 3% sequentially, primarily driven by supply constraints from maintenance and lingering effects from Covid and weather-related outages, as well as global logistics constraints across several key value chains.
Equity earnings were $224 million, up $118 million from the year-ago period due to margin expansion at Sadara and the Thai and Kuwait joint ventures. Sequentially, equity earnings were down $25 million driven by impacts from planned maintenance turnaround activity at Sadara.
GAAP Net Income was $1.8 billion. Operating EBIT1 was $2.3 billion, up $1.2 billion from the year-ago period, with gains in every operating segment due to margin expansion and increased equity earnings. Sequentially, operating EBIT declined $621 million as price gains in Performance Materials & Coatings and Industrial Intermediates & Infrastructure were more than offset by increased raw material and energy costs and supply constraints.
Cash provided by operating activities – continuing operations was $2.6 billion, up $901 million year-over-year and a decrease of $162 million compared to the prior quarter. Free cash flow1 was $2.1 billion.
Returns to shareholders totaled $912 million in the quarter, comprised of $512 million in dividends and $400 million in share repurchases.
Jim Fitterling, chairman and chief executive officer, commented on the quarter: “In the fourth quarter, Team Dow once again delivered top- and bottom-line growth year-over-year across all operating segments. Underlying demand strength and continued operating discipline enabled us to overcome supply and logistics constraints as well as higher raw material and energy costs.
“Our performance in the fourth quarter capped a record year for Dow in 2021. We achieved full year sales of $55 billion and operating EBIT of $9.5 billion, with growth and margin expansion across all operating segments, as well as $7.1 billion of cash flow from operations and annual ROIC of more than 22%. We delivered on our financial priorities with proactive liability management actions through the year, including reducing gross debt by $2.4 billion and a $1 billion elective pension contribution, while returning a cumulative $3.1 billion to shareholders. Importantly, we also announced our plan to decarbonize our assets while growing our earnings, positioning Dow to continue on a path to deliver more than $3 billion of accretive underlying earnings growth, advance our sustainability leadership, and create long-term value for our shareholders.”
“In 2022, we expect continued demand strength across our end markets, supported by growing industrial production and sustained consumer spending,” said Fitterling. “We are working hard to normalize operating rates, inventory and service levels following a year of supply constraints and Covid-related logistics challenges.
“While the global economy continues to be impacted by supply chain pressures, these logistics constraints are expected to ease throughout the year to fulfill elevated order backlogs and pent-up customer demand. As we navigate these near-term dynamics, we will continue to be disciplined in the implementation of our strategy and progress on our higher-return, lower-risk growth projects and efficiency programs. We will also further advance our key sustainability initiatives to decarbonize our assets and capture increasing demand for lower carbon and circular solutions.”
