The No. 1 U.S. chemical maker, Dow Chemical Co., is reportedly looking to cut fixed costs by $1 billion over the next three years, building on reductions that have helped boost margins. Shares of the company, which reported a better-than-expected profit for the fourth straight quarter, rose nearly 4 %.
Dow hopes to sell lower-margin business lines to raise another $3.2 billion to $4.7 billion by the end of 2015. This month Dow began shopping around Sodium Borohydride, AgroFresh and Angus Chemical Co.–units that could bring in $2 billion of that total, the company said.
Dow posted a profit of $852 million, or 71 cents a share, for the third quarter, up from $594 million, or 49 cents a share, a year earlier. Excluding one-time items, earnings were 72 cents a share, up from 50 cents in the prior-year period. Revenue rose by 4.9% to $14.41 billion.
The Company reported increased sales in all geographic areas. Sales in developed geographies grew 4%, led by gains in North America, where sales rose 7%. Sales in emerging geographies increased 6%, due primarily to strength in Performance Plastics in Latin America.
Andrew N. Liveris, Dows chairman and chief executive officer, stated, “Dow delivered a strong quarter of top- and bottom-line growth. Our low-cost positions and geographic diversification enabled growth and improving operating rates in the quarter.”
In the meantime Dow expects that within a year oil prices will creep back toward $100 a barrel, up from the current $80 a barrel. Meanwhile, lower oil prices should help spur global economies and demand for Dow products, Mr. Liveris said.
“At the end of the day, this is in the good basket, not the bad basket,” he said.
Less expensive oil could also quiet down calls for U.S. exports of oil and natural gas, making it less profitable to ship overseas, Mr. Liveris said. He is a vocal critic of plans to export American oil and gas and has argued that unfettered shipments abroad could squash a resurgence in U.S. manufacturing.
Dow makes everything from insecticides to plastics.
Up to Tuesday’s close, Dow’s shares rose nearly 17 percent over the past 12 months. They closed at $48.21 on the New York Stock Exchange.
Latest posts by Alan O’Leary (see all)
- Woman Found Alive After Missing for 42 Years - Oct 30, 2017
- October Will Welcome The Draconid Meteor Shower And The Orionids - Oct 6, 2017
- Scientists Are At A Loss After Unearthing A Porpoise Grave - Sep 22, 2017