MIDLAND, Mich.—Dow Inc. saw its sales for the third quarter drop 10 percent vs. the same period in 2019, but also posted a 16 percent rise compared to the second quarter when the coronavirus pandemic hit globally.
The Midland-based chemical company's packaging and specialty plastics noted that net sales were down 10 percent for the quarter in 2020 at $4.6 billion. For the entire corporation, net sales were $9.7 billion vs. $10.7 billion in 2019.
Consumer packaging was particularly strong within the packaging and specialty plastics sector in the third quarter, which saw 14 percent in net sales improvement driven by strong pricing and four consecutive months of polyethylene price increases in consumer packaging applications, the company said in an Oct. 22 news release.
"We increased our operating rates to match rising demand as the recovery gained momentum," Chairman and CEO Jim Fitterling said in the release. "In polyethylene, we achieved pricing gains of 12 percent over the prior quarter as demand for packaging remained resilient, and in polyurethanes, we delivered higher volumes and margins underpinned by improving consumer durable demand."
Packaging and specialty plastics also reported a net sales decline driven by reduced polyethylene prices compared to the same period in 2019.
"Notably, the decline in the U.S. and Canada was primarily driven by lower licensing revenue and hurricane-driven outages," Dow said.
The company listed a 9.1 percent fall in sales in its industrial intermediates and infrastructure business, which houses polyurethanes, in the third quarter of 2020.
Sales fell to $3.1 billion compared with $3.4 billion in the equivalent period in 2019. At the same time, operating earnings in the division fell 46.1 percent to $104 million in the quarter of 2020. This compares with $193 million in 2019.
The falls were due to reduced demand in North America's automotive, industrial and energy end markets. Prices also fell with volumes. However, compared with the previous quarter, sales improved by 27 percent as demand for consumer durables, construction and the automotive industry improved, said Dow.
In the polyurethanes segment specifically, Dow said demand in furniture and bedding and domestic appliances was all higher than in the third quarter of 2019. And "the business delivered double-digit volume growth overall."
"We enter the fourth quarter with sequential momentum, improved financial flexibility and focus on cash, which will benefit us as the gradual recovery strengthens and broadens," Fitterling said.