Dow Inc. (NYSE:DOW) -2% pre-market on Thursday after reporting better than expected Q2 earnings and revenues, but volumes at two of the company’s three main businesses declined in the quarter, while a stronger dollar also weighed on sales.
Q2 net income fell to $1.68B, or $2.26/share, from $1.93B, or $2.51/share, in the year-ago quarter, as gains in the company’s Performance Materials & Coatings segment were more than offset by higher raw material and energy costs across the company.
Q2 operating EBITDA fell 14% Y/Y to $3.06B, as Dow (DOW) said gains in Packaging & Specialty Plastics were more than offset by declines in Industrial Intermediates & Infrastructure.
Q2 sales by segment: Packaging & Specialty Plastics +16% Y/Y to $8.23B, Industrial Intermediates & Infrastructure +3.7% to $4.37B, Performance Materials +22% to $3B.
Q2 operating EBITDA by segment: Packaging & Specialty Plastics -25% Y/Y to $1.78B, Industrial Intermediates & Infrastructure -31% to $562M, Performance Materials +71% to $758M.
Overall volumes fell 2% Q/Q, driven by declines primarily in Europe and China; continued strong end-market demand drove a 5% Y/Y volume increase in Packaging & Specialty Plastics, but volume fell in the other two divisions.
Cost of sales jumped 20.1% to outpace sales growth and reduce gross margin to 17.65% from 22.65%.
“Our competitive advantages and relentless focus on disciplined execution enabled us to navigate the impacts of pandemic-related lockdowns in China, continued logistics constraints, and higher energy and raw material costs,” the company said.