Dow delivered a strong turnaround in the second quarter, posting higher sales and a return to profitability as price gains across all business segments and regions, coupled with aggressive cost-cutting initiatives, boosted earnings.

 

Net sales climbed 20% year over year to $12.1 billion, driven by a 20% increase in local prices, led by Packaging & Specialty Plastics, where polyethylene prices rose across every region. Favorable currency added 1% to sales, while volumes edged down 1%, as gains in Performance Materials & Coatings were more than offset by planned maintenance-related declines in Packaging & Specialty Plastics.

 

The company reported GAAP net income of $802 million, while operating EBIT surged to $1.6 billion, an improvement of $1.7 billion from a year earlier, reflecting stronger pricing and the impact of Dow's ongoing self-help initiatives.

 

GAAP earnings per share were $0.99, while operating EPS reached $1.44, compared with a loss of $0.42 in the same quarter last year. Operating EPS excluded significant items totaling $0.45 per share, primarily related to Transform to Outperform costs, partially offset by an income tax adjustment tied to a payment from NOVA Chemicals.

 

Cash generated from continuing operations totaled $1.3 billion, supported by stronger earnings across all businesses despite an expected working capital build driven by revenue growth. The company also returned $253 million to shareholders through dividends during the quarter.

 

"Team Dow delivered strong second quarter results through disciplined and timely execution, reliably serving our customers, and accelerating our self-help actions," said Karen S. Carter, Dow CEO. 

 

"Market conditions were supportive this quarter, and our self-help initiatives delivered ahead of plan, further reinforcing the improvement in our earnings as we continue to strengthen Dow's resilience and agility. 

 

"We now expect to generate approximately $200 million more in benefits from Transform to Outperform this year, enabling us to increase the total in-year benefits from self-help to greater than $1.3 billion. Our actions to become a leaner, more competitive company position Dow well to continue winning with our customers while delivering enhanced long-term shareholder value."

 

Packaging & Specialty Plastics remained Dow's strongest business, with second-quarter sales rising 27% to $6.4 billion.

 

The increase was fueled by a 30% rise in local prices, reflecting higher polyethylene prices across all regions. Currency contributed an additional 1%, while volumes fell 4% because of planned maintenance activity in Hydrocarbons & Energy that reduced merchant sales.

 

Operating EBIT jumped to $1.3 billion, up $1.2 billion from a year ago, as stronger polyethylene pricing expanded margins and self-help measures offset the impact of maintenance activity.

 

Infrastructure segment sales increased 14% year over year to $3.2 billion.

 

Local prices rose 15% across both businesses and all regions, while currency added 1%. Volumes slipped 2%, reflecting lower demand in Polyurethanes & Construction Chemicals, including impacts from the Middle East conflict, partly offset by growth in Industrial Solutions.

 

Operating EBIT improved by $431 million year over year to $246 million, driven by stronger margins, lower planned maintenance, self-help initiatives and the suspension of equity loss recognition from Sadara.

 

Polyurethanes & Construction Chemicals recorded higher sales through price gains despite weaker volumes, as industrial demand growth was outweighed by disruptions linked to the Middle East conflict.

 

Industrial Solutions delivered higher sales, supported by price increases across all regions, volume growth from recent alkoxylation investments and stronger demand tied to data center applications.

 

Performance Materials & Coatings generated $2.4 billion in second-quarter sales, an increase of 11% from a year earlier.

 

Local prices rose 4%, led by Coatings & Performance Monomers, while currency contributed 1%. Volumes increased 6%, driven by stronger demand across both businesses, particularly downstream silicones.

 

Operating EBIT, however, declined $19 million to $133 million, as higher fixed costs—including turnaround activity and the shutdown of the Barry, U.K., upstream siloxanes plant—more than offset benefits from self-help initiatives.

 

Consumer Solutions reported stronger sales on higher downstream silicones volumes, supported by demand in consumer, electronics and home care markets.

 

Coatings & Performance Monomers also posted higher sales across all regions, driven by stronger pricing and volumes in acrylic monomers and architectural coatings.

 

Looking ahead, Dow expects its restructuring and productivity program to deliver even greater benefits during the second half of 2026 and into next year as it focuses on growth, portfolio investment and disciplined capital allocation.

 

"As we look into the second half of 2026, we will continue to build a more agile and resilient company that sets a new competitive standard," said Carter. 

 

"We will do so by advancing three priorities: growth and innovation in attractive end markets, investing in and strengthening our portfolio, and ensuring balanced capital allocation. 

 

"Aligned to this, Transform to Outperform is delivering improvements in both growth and productivity, and we expect the impact of these efforts to ramp significantly throughout the remainder of this year and into 2027. Taken together, our collective actions are focused on enhancing the long-term value Dow delivers across the cycle."