Chemicals maker Dow Inc swung to a second-quarter profit and reported revenue that rose above expectations, boosted by sharp local price increases amid stronger demand. Net sales were $13.9 billion, up 66% versus the year-ago period and 17% sequentially, with gains in all operating segments, businesses and regions. Local price increased 53% versus the year-ago period and 16% sequentially, reflecting gains in all operating segments, businesses and regions, driven by tight supply and demand fundamentals across key value chains.

The company’s volume increased 9% versus the year-ago period, with gains in all operating segments, led by polyurethane and silicones applications on demand recovery from the impact of the pandemic. Sequentially, volume increased 1% as demand gains in infrastructure, industrial and personal care end markets were partly offset by lingering supply constraints from the impact of Winter Storm Uri on the U.S. Gulf Coast.

Meanwhile, equity earnings were $278 million, up $373 million compared to the year-ago period, primarily driven by margin expansion in polyurethanes and polyethylene at the Sadara and Kuwait joint ventures. Equity earnings were up $54 million compared to the prior quarter, primarily driven by the Thai joint ventures.

GAAP Net Income was $1.9 billion. Operating EBIT was up $2.8 billion from the year-ago period, with increases in all operating segments and businesses. The gains reflected margin expansion and improved equity earnings due to tight supply and increased demand across key chains. Sequentially, operating EBIT was up $1.3 billion, with increases in every operating segment and business.

Dow reduced gross debt by $1.1 billion in the quarter. The Company’s proactive liability management actions to redeem existing notes maturing in 2024 have resulted in no substantive long-term debt maturities due until the end of 2025 and a reduction in annual interest expense by $35 million.

Jim Fitterling, Chairman and CEO, commented on the quarter:  “Our second quarter results reflected strong demand in all our value chains and regions as we achieved substantial growth in sales and earnings both sequentially and year-over-year. Team Dow maintained its focus on execution and cost discipline, resulting in continued margin expansion. With our deliberate approach to capital allocation, we reduced gross debt by more than $1 billion; advanced our incremental, high-growth investments; returned cash to shareholders through our industry-leading dividend; and resumed our share repurchase program. And, we releasedour consolidated ESG report, “INtersections”, which provides enhanced transparency on our environmental, social and governance priorities and performance.”

Speaking on the outlook, Fitterling, said: “Our first half performance reflects Team Dow’s agility in responding to increased customer demand despite industry supply disruptions across many value chains.

“Looking ahead, we expect earnings momentum from additional improvements in consumer spending, international travel and industrial production. As the economic recovery broadens around the world, Dow is well positioned to continue capturing value with our differentiated materials science portfolio and participation in fast-growing end markets. We will share more about our strategic and financial priorities to continue creating long-term value for all of our stakeholders at our upcoming Investor Day on October 6, 2021.”