Dow Chemical Profit Falls on Acquisition Costs
Dow ChemicalThursday reported lower-than-expected third-quarter profit, hurt by a change in German tax law and a charge for acquisition costs.
The company also has begun to see some slowing in the U.S. industrials sector, according to Chief Executive Andrew Liveris.
"We are starting to see some weakening in what I call 'the industrial economy' in the United States, so that's beyond residential housing, that's beyond auto, and it's into the supply chain of many sectors such as pipe, such as coatings, such as wire and cable, such as packaging -- industrial packaging in particular," Liveris said in an interview on CNBC.
"Now, the good news/bad news to that is, the industrial economy is only about 11 percent of the U.S. economy today. Seventy percent of the economy is the consumer economy, and we're still seeing that as strong," Liveris said.
In the latest period, net income fell to $403 million, or 42 cents a share, from $512 million, or 53 cents a share, a year earlier, when Dow took charges to shut down several of its operations.
The latest results included charges of 38 cents a share from the change in German tax laws and 4 cents for the acquisition of research and development assets.
Excluding special items, the largest U.S. chemical maker posted quarterly earnings of 84 cents a share. Analysts on average were expecting 91 cents, according to Reuters Estimates.
Quarterly sales rose 10 percent to $13.59 billion, ahead of Wall Street's forecast of $12.65 billion.
The Midland, Michigan-based company is focused on increasing its more profitable specialty businesses, while expanding its commodity chemicals operations through a lower-cost joint venture strategy.
"Global economic conditions remain reasonably healthy, even though there may be some concerns about the resilience of the U.S. economy going forward," Chief Executive Andrew Liveris said in a statement.
Liveris said there was particularly strong demand in emerging markets in Eastern Europe, Asia Pacific and Latin America.
However, he cited concerns about volatile feedstock and energy costs.
Shares of Dow have fallen about 1.5 percent in the last six months, while the Standard & Poor's Chemicals Index has risen about 13.5 percent.
CNBC.com contributed to this report.