The Dow Chemical Company (DOW) said Thursday that it lost $486 million in the second quarter, hurt by sharply lower revenue and charges related to its purchase of Rohm & Hass.
The Midland, Michigan-based company reported a second quarter net loss of $486 million, or 47 cents per share, compared with a profit of $762 million, or 81 cents per share, in the year-ago period. Excluding one-time acquisition charges and preferred dividends, Dow saw an adjusted profit of 5 cents per share.
Revenue plunged 31% percent to $11.32 billion, down from $16.35 billion in the prior-year period.
On average Wall Street analysts expected a net loss of 8 cents per share, excluding items, but on much higher revenue of $13 billion.
In order to combat the sharply lower revenue amid the economic downturn, Dow has rid itself of certain assets, closed 20 chemical factories, and cut around 10,000 jobs. Dow said Thursday it would sell its Malaysia-based Optimal business to rival Petronas for $660 million.
Dow Chemical shares rose $1.97, or +9.8%, in morning trading Thursday.
The Bottom Line
We removed shares of DOW from our “Recommended” list on Sept.29, when the stock was trading at $33.97. The company has a 2.96% dividend yield, based on last night’s closing stock price of $20.27. The stock has technical support in the $15-$16 price area. If the shares can continue the recent momentum, we see overhead resistance around the $25-$27 price range. We would remain on the sidelines for now.
The Dow Chemical Company (DOW) is not recommended at this time, holding a Dividend.com DARS Rating of 2.9 out of 5 stars.
Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.
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