Dow Chemical 4Q Profit Up on Sales Increase
Thursday, January 26th 2006, 10:27 am
By: News On 6
MIDLAND, Mich. (AP) _ Dow Chemical Co. said Thursday its fourth-quarter earnings grew 7 percent despite higher raw material and energy costs and lower output because of hurricanes. Full-year income soared 61 percent.
The company's fourth-quarter profit rose to $1.1 billion, or $1.12 per share, from $1 billion, or $1.06 per share, a year ago. Excluding certain unusual items, Dow said it would have earned $1.02 per share in the latest quarter, up from 85 cents a year ago.
Analysts surveyed by Thomson Financial expected profit of $1.04 per share on sales of $12.09 billion.
Revenue increased 9 percent to $11.9 billion from $10.9 billion. The company said prices rose 10 percent, with strong gains in all segments except its agricultural sciences unit. This made up for lower volume, a result of hurricanes Rita and Katrina, Dow said.
The higher sales were partly offset by a $4 billion increase in raw-material and energy costs, Dow said.
For all of 2005, Midland-based Dow saw its profits soar 61 percent to $4.5 billion, or $4.62 per share, on sales of $46.3 billion.
``In 2005, we realized record sales; we achieved record earnings; we reduced net debt by more than $2.5 billion; and for the third year in a row, with institutionalized financial discipline and operational excellence, we recovered lost margin,'' Dow Chief Executive Andrew N. Liveris said in a statement.
Dow said it expects feedstock and energy costs to continue to be volatile in 2006, but predicted that chemical and plastic demand will continue to grow, led by the Asia Pacific region, Latin America and other emerging markets.
Also Thursday, a South Korean court ordered Dow and St. Louis-based Monsanto Co. to pay $62 million in medical compensation to South Korean veterans of the Vietnam War and their families over the effects of Agent Orange.
The Seoul High Court said the manufacturers failed to ensure the safety of the herbicide.
In a joint statement, Dow and Monsanto said they would appeal the ruling.
``The court's decision is contrary to the facts presented during the hearing, contrary to the facts as determined by the Korean trial court which had previously ruled in favor of Monsanto and Dow, and contrary to the overwhelming weight of independent scientific evidence which has not found a causation between exposure to Agent Orange and any serious human illness, as all other courts addressing this issue have found,'' the companies said.
South Koreans made up the largest foreign contingent of U.S. allies fighting in Vietnam, contributing 320,000 troops. South Koreans, Vietnamese and many U.S. veterans blame a variety of illnesses on exposure to Agent Orange, including miscarriages, birth defects, cancers and nervous disorders.