Earnings
Dow returns to an operating profit as polyethylene prices lift sales 13%, while Asia Pacific volumes fall 12% on Middle East disruption
Local prices rose 14% and free cash flow doubled, but volumes slipped and the chemicals maker gave no fourth-quarter outlook.
HedgeWeekly News Desk ·
Dow Inc. posted third-quarter operating earnings of 71 cents a share on Thursday, compared with a loss of 19 cents a year earlier, as higher prices for polyethylene drove a turnaround. Net sales rose 13% to $11.27 billion, and GAAP net income was $525 million, or 62 cents a share, up from $124 million.
The gain was almost entirely price. Local prices rose 14% while volume fell 1%. In Asia Pacific, volume dropped 12%, which the company attributed to the Middle East conflict, where it said the impact was most pronounced. Operating EBIT jumped to $887 million from $180 million, led by Packaging & Specialty Plastics, whose sales rose 18% to $5.78 billion and operating EBIT nearly tripled to $585 million.
Free cash flow reached $1.13 billion, double the $566 million of a year earlier, helped by a working-capital release of more than $400 million, and Dow said it has cut debt by about $600 million this year. Results also benefited from a restarted cracker in Europe, Middle East, Africa and India and from Dow no longer recognising equity losses from its Sadara joint venture. The company closed its Barry, U.K., siloxanes plant and completed the first of three planned European shutdowns.
Why it matters: Dow's recovery so far rests on pricing rather than demand, and the release offered no fourth-quarter guidance to show whether polyethylene prices can hold. The company is leaning on self-help, saying it remains on track for more than $1 billion of EBITDA uplift in both 2026 and 2027, with benefits from the European closures building through 2027. Investors will look for evidence that volumes recover outside the Middle East-affected regions before treating the margin rebound as durable.