Dow beat earnings expectations as profit jumped on higher prices, cost cuts

Dow Inc. reported third-quarter GAAP net income of $525 million on Thursday, up from $124 million a year earlier, as higher prices and savings from its self-help actions more than offset higher raw materials and logistics costs.

Operating earnings, which exclude significant items, were 71 cents a share, compared with a loss of 19 cents a share in the year-ago period. Analysts expected 64 cents a share, according to The Wall Street Journal. GAAP earnings were 62 cents a share, up from 8 cents.

Net sales were $11.3 billion, up 13% from a year earlier, with increases in all operating segments. Analysts expected $11.22 billion, according to The Wall Street Journal. Local price rose 14%, led by Packaging & Specialty Plastics, where polyethylene prices rose in all regions. Currency was flat.

Volume fell 1%. Volumes rose in all regions except Asia Pacific, where the company said the impact of the Middle East conflict was most pronounced.

Operating EBIT was $887 million, up $707 million from a year earlier. Operating EBITDA was $1.55 billion, compared with $868 million.

Packaging & Specialty Plastics generated $5.8 billion in sales, an 18% increase, and its operating EBIT came in at $585 million, up $386 million. Industrial Intermediates & Infrastructure posted operating EBIT of $176 million, compared with a loss of $47 million a year earlier. Performance Materials & Coatings operating EBIT rose to $154 million from $80 million.

Cash provided by operating activities from continuing operations was $1.8 billion, up $709 million from a year earlier. Free cash flow was $1.1 billion. Dow paid $253 million in dividends during the quarter.

"Dow delivered a solid third quarter, driven by targeted downstream growth and disciplined execution against an evolving macro backdrop," CEO Karen S. Carter said in a statement. She said the company is poised to hit the enlarged $700 million target for growth and productivity gains from its Transform to Outperform program this year, and about $2 billion in total uplift by the end of next year.

Carter said Dow released more than $400 million of working capital during the quarter and has cut debt by about $600 million so far this year. She said the first of three European asset shutdowns produced sequential gains, with total benefits expected to build through 2027.

The company said its self-help actions are on track to deliver more than $1 billion of EBITDA uplift in both 2026 and 2027. Those actions include a 2025 $1 billion cost program, the European asset actions and Transform to Outperform.

Dow will host a webcast of its earnings conference call with investors at 8 a.m. ET on Thursday.