MIDLAND, Mich.—Dow Inc. posted strong third-quarter financial results as the firm continues to recover from the challenges of 2020.
Midland, Mich.-based Dow, a major supplier of polyethylene, polyurethane and specialty materials, posted sales of $14.8 billion for the three months ended Sept. 30. That's an increase of more than 52 percent versus the same quarter last year. Dow also rang up a profit of $1.7 billion for the quarter after losing $1 million in the year-ago period.
"Despite higher energy costs and industry-wide value chain disruptions from hurricanes on the U.S. Gulf Coast, our proactive storm preparations enabled us to maintain the safety of our team and operations, and recover quickly," Chairman and CEO Jim Fitterling said in an Oct. 21 news release.
"Coupled with our global footprint, feedstock flexibility and structural cost advantages, we continued to capture robust end-market demand and price momentum."
Dow's Packaging & Specialty Plastics unit, including PE, saw sales grow more than 67 percent versus third-quarter 2020 to $7.7 billion. The unit's operating earnings before interest and taxes (EBIT) more than tripled to $2.9 billion.
Officials said in the release that the unit's sales increase was led by local price gains in industrial and consumer packaging and flexible food and beverage packaging. Sales volumes in pounds declined year-over-year due to lower PE supply from planned maintenance turnarounds and weather-related outages.
Dow's Industrial Intermediates & Infrastructure unit, including PU, saw a sales hike of more than 45 percent to $4.5 billion for the quarter. The unit's operating EBIT surged almost seven times to $713 million.
Officials said the PU & Construction Chemicals business within the unit grew net sales, with price gains in all regions on tight supply and demand dynamics. The business also saw lower sales volumes in pounds, driven by a planned transition of a low-margin co-producer contract, weather-related outages and third-party supply constraints.
"We continue to see robust end-market demand that is expected to extend into 2022, coupled with near-term logistics constraints and low inventory levels across our value chains," Fitterling said. "Looking ahead, Dow is well-positioned to increase earnings, cash flow and returns as we decarbonize our footprint and achieve our 2030 and 2050 carbon emissions reduction targets."
As part of Dow's 2021 Investor Day event on Oct.6, officials announced ambitious environmental goals, including plans to build the world's first net-zero carbon emissions ethylene cracker in Canada.
Dow will convert assets in Fort Saskatchewan, Alberta, to create a net-zero carbon emissions complex. These investments will decarbonize around 20 percent of Dow's global ethylene capacity while growing its polyethylene resin supply by about 15 percent.
These new investments support Dow's commitment to reduce its net annual carbon emissions by an additional 15 percent, meaning the firm will have reduced emissions by 30 percent between 2005-2030.
Dow employs almost 36,000 worldwide and posted sales of about $39 billion in 2020. On Wall Street, Dow's per-share stock price was at $58.30 in early trading Oct. 21, roughly flat with its price at the start of 2021.