MIDLAND, Mich.—Dow Inc. has roared into 2021 with strong first-quarter financial results.
The materials giant posted sales of almost $11.9 billion for the quarter, up almost 22 percent vs. the same quarter in 2020. The firm also posted a profit of just over $1 billion for the quarter, almost four times higher than its profit in the year-ago quarter. The global COVID-19 pandemic began affecting financial results of many public firms in March 2020.
"We remained agile in an extremely dynamic business environment," CEO and Chairman Jim Fitterling said on an April 22 conference call. He added that all of Dow's production units that were affected by Winter Storm Uri, which hit Texas in February, are back online. Dow's production of polyethylene, ethylene and related materials was affected by the storm.
"We quickly and safely recovered from the storm," Fitterling said. "Some of our recovery work began a week after." He added that in the first quarter, Dow "benefited from strong price momentum" and that the firm's sales volumes "are in line with a year ago."
On the call, Howard Ungerleider, president and chief financial officer, said that demand is strong in packaging, electronics and other sectors. He added that material supplies are expected to remain tight for the foreseeable future.
"Tight supplies and inventories are supporting high prices across the value chain," Ungerleider said. "Inventory building isn't likely until later this year. We're seeing broad-based economic momentum and elevated consumer demand."
Fitterling agreed, saying that 2021 "is looking like a year in which we see 13 months of demand and 11 months of supply."
He also cited several factors that could boost markets served by Dow, including a return to air travel, expansion in global manufacturing activity, continued government stimulus, vaccine rollouts and infrastructure legislation.
Dow on April 22 also announced a partnership with British firm Mura Technology on a process aimed to keep plastic waste out of the environment. The collaboration will support rapid scaling of Mura's new HydroPRS (Hydrothermal Plastic Recycling Solution) recycling process.
Officials described HydroPRS as "a revolutionary advanced recycling process that uses supercritical steam to convert plastics back into the chemicals and oils from which they were made, for use in new, virgin equivalent plastic products."
The Dow-Mura deal "marks an important step in Dow's commitment to advance a circular economy for plastics and keep plastic waste from entering the environment, they added.
Dow's Packaging & Specialty Plastics unit, including PE resin, posted sales of almost $6.1 billion in the first quarter, up almost 32 percent vs. the year-ago period. The unit's operating earnings before interest and taxes (EBIT) more than doubled to almost $1.23 billion. On the call, Fitterling said that Dow "had growth in plastics and packaging even through COVID. …People underestimated how much growth was there."
First-quarter sales at Dow's Industrial Intermediates & Infrastructure unit—including polyurethanes—were up more than 18 percent to just over $3.6 billion. The unit's operating EBIT jumped more than 86 percent to $326 million.
On Wall Street, Dow's per-share price was down 5 percent in early trading April 22, even though first-quarter results beat estimates. The price was near $61.60—up about 14 percent since Jan. 1.