Earnings Preview: Dow Chemical

Jul.25.12 | About: Dow Chemical (DOW)

The Dow Chemical Company (DOW) is scheduled to report its Q2 2012 results on July 26, 2012, before the market opens. The street expects EPS and revenue of $0.64 and $15.70B, respectively.

In this article I will recap the historical results of the company, its latest EPS estimates vs. surprises, the latest news from DOW and the news from its closest competitors.

The Dow Chemical Company Revenue and Net Income History

Recent EPS Actuals vs. Estimates

In the last quarter it reported $0.61 EPS, beating analyst estimates of $0.60.

The Dow Chemical Company EPS Historical Results vs Estimates

The consensus EPS estimate is $0.64 based on 15 analysts' estimates, down from $0.85 a year ago. Revenue estimates are $15.70B, down from $16.05B a year ago. The median target price by analysts for the stock is $36.00.

Average recommendation: Overweight

Source: Marketwatch

Latest News

  • On June 29, 2012, Dow AgroSciences, a wholly owned subsidiary of The Dow Chemical Company, and The Royal Barenbrug Group, announced a global strategic relationship for the development and commercialization of advanced germplasm in forage seeds.
  • On May 24, 2012, Reuters reported that an arbitrator ruled Kuwait's state-run chemical company must pay Dow Chemical Co $2.16 billion for wrongly canceling a planned plastics joint venture in 2008, Dow said on Thursday.
  • On April 26, 2012, The Dow Chemical Company announced that it is confidence in ability to deliver higher and sustainable earnings growth over the long term.
  • On April 19, 2012, The Dow Chemical Company announced that the Company will construct a new world-scale ethylene production plant at Dow Texas Operations in Freeport, TX, as part of Dow's previously announced comprehensive plan to further connect its U.S. operations with cost-advantaged feedstocks available from increasing supplies of U.S. shale gas. The new ethylene production facility at Dow Texas Operations will employ up to 2,000 workers at its construction peak.
  • On April 12, 2012, The Dow Chemical Company announced that its Board of Directors has declared a 28% increase in the second quarter dividend, from $0.25 per share to $0.32 per share.
  • On April 2, 2012, The Dow Chemical Company announced it is implementing cost reductions in line with its commitment to actively manage its portfolio and in response to continued weakness in the European economy.
  • On March 27, 2012, BM&FBovespa (Bovespa) announced that, on April 4, 2012, the Brazilian Depositary Receipts (BDRs) Level I of The Dow Chemical Company will start being traded on Bovespa's over-the-counter (OTC) market, quoted in BRL per unit and with standard trading lot of 100 BDRs, under the ticker DOWB11B.
  • On March 21, 2012, The Dow Chemical Company's Dow AgroSciences LLC and Dualsystems Biotech announced a drug profiling agreement. Under the agreement, Dualsystems Biotech will use its drug profiling platform to identify molecular targets for an undisclosed small molecule lead candidate in Dow AgroSciences' agrochemical discovery program.
  • On March 5, 2012, Dow AgroSciences LLC, a wholly owned subsidiary of The Dow Chemical Company, announced that it has divested its European Dithane fungicide business to Indofil Industries Ltd. of Mumbai, India.

Competitors

BASF SE (OTCQX:BASFY), E. I. du Pont de Nemours and Company (DD), and Monsanto (MON) are competitors for The Dow Chemical Company and the table below provides the key metrics for these companies and the industry.

The Dow Chemical Company key ratio comparison with direct competitors

The chart below compares the stock price changes as a percentage for the selected companies and S&P 500 index for the last one year period.

DOW ChartClick to enlarge

DOW data by YCharts

Competitors' Latest Development

  • On July 12, 2012, E. I. du Pont de Nemours and Co and Fiber-Line Inc. announced that they are collaborating to bring a new protective solution to better connect the world.
  • On July 11, 2012, Monsanto Co announced a $500 million public debt offering, with $250 million in 10-year bonds and $250 million in 30-year bonds. The 10-year notes will be issued at 99.884% and bear interest at 2.20%, resulting in a yield of 2.21%. These notes mature on July 15, 2022 with a first interest payment date of January 15, 2013.
  • On July 10, 2012, Reuters reported that opening arguments were underway in a potentially pivotal legal battle between agricultural giants Monsanto and E. I. du Pont de Nemours and Co over Monsanto's control of a seed technology worth billions of dollars.
  • On July 6, 2012, E. I. du Pont de Nemours and Co announced that in a ruling favoring Danisco, on June 29, the Technical Board of Appeal at the European Patent Office (EPO) revoked Novozymes' animal feed enzyme patent, European Patent 1,804,592 (EP'592), in entirety throughout Europe.
  • On June 27, 2012, Monsanto Company announced that for fiscal 2012, it expects earnings per share (EPS) guidance to be in the range of $3.65 to $3.70 on an ongoing basis and $3.73 to $3.78 on an as-reported basis.
  • On June 22, 2012, Monsanto Co announced that it has completed the previously announced purchase of planting technology developer Precision Planting, Inc. The Precision Planting team is now part of Monsanto's Integrated Farming Systems unit, which will utilize advanced agronomic practices, seed genetics and on-farm technology to deliver optimal yield to farmers while using fewer resources.
  • On June 21, 2012, E. I. du Pont de Nemours and Co announced that it has filed a lawsuit against Heraeus Materials Technology, LLC and its customer SolarWorld Industries America, Inc. in U.S. Federal Court for the District of Oregon for infringing a recently issued DuPont patent related to front-side metallization paste compositions used in solar cell technology.
  • On June 19, 2012, Reuters reported that Monsanto Co is suing chief rival E.I. Du Pont de Nemours and Co (Du Pont), accusing DuPont and its agricultural crop subsidiary of treading on Monsanto's technological turf by copying key new plant breeding innovations.
  • On June 8, 2012, Reuters reported that DuPont had acquired a unit of Britain's BAE Systems plc and taken a minority stake in a U.S. high-technology start up, Nanocomp Technologies Inc, to expand its portfolio of high-performance protection materials.
  • On June 6, 2012, Monsanto Company announced that its Board of Directors has approved a new three-year share repurchase program and declared a quarterly dividend. Monsanto's board authorized a new share repurchase program, effective July 1, 2012, for up to $1 billion of Monsanto's common stock over a three-year period.
  • On May 30, 2012, Monsanto Company announced that the Company is raising fiscal 2012 earnings per share guidance to the range of $3.65 to $3.70 on an ongoing basis and $3.73 to $3.78 on an as-reported basis.
  • On May 1, 2012, DuPont announced that it has acquired from Bunge full ownership of the Solae, LLC joint venture. DuPont previously owned 72% of the joint venture while Bunge owned the remaining 28%. Solae, LLC is a world leader in developing soy-based ingredients for nutritious, great-tasting products.
  • On April 25, 2012, DuPont announced that Board of Directors has approved a 5% increase in the Company's quarterly cash dividend. The second quarter dividend will increase from $0.41 to $0.43 per share for common stock, payable June 12, 2012, to stockholders of record May 15, 2012.
  • On April 4, 2012, Monsanto Company announced that it has raised the ongoing EPS expectation above the high end of the initial guidance to $3.49-$3.54 per share for fiscal 2012.
  • On March 23, 2012, China Sunergy Co., Ltd. announced that the Company, together with China Electric Equipment Group (CEEG) have signed a Letter of Intent with DuPont's DuPont China Holdings (DuPont) for strategic collaboration relating to photovoltaic (solar) technologies & materials, power transformer, insulation and aircraft composite materials over a three-year period.
  • On February 14, 2012, DuPont announced that it has signed a multi-year lease agreement with Beijing International Flower Port to build a state-of-the-art Technology Hub for its Pioneer seed business in Beijing, China.
  • On February 14, 2012, Reuters reported that Monsanto Company will appeal a French court ruling that found it responsible for the poisoning of a farmer who inhaled a weedkiller in what is the first such case to reach court in France.
  • On February 10, 2012, Reuters reported that DuPont has started the auction of its car paint business, which could bring in more than $4 billion and has drawn early interest from a number of private equity firms, according to sources familiar with the matter.

Technical Overview


The stock has a market capitalization of $36.96B and is currently trading at $30.92 with a 52 week range of $20.61 - $36.90. The stock's year-to-date performance has been 9.41%. It is currently trading above 200 SMA, but below 20 and 50 SMA.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.