Dow Chemical said fourth-quarter profit fell 11%, hurt by weakness in its basic-chemicals unit and weak sales in the U.S. But the results outpaced analysts' expectations.
Dow said net income in the last three months of 2006 fell to $975 million, or $1 a share, from $1.1 billion, or $1.12 a share, a year ago.
The latest quarter was hurt by a charge of $85 million for a fine imposed by the European Commission related to a rubber price-fixing scandal, as well as a $12 million restructuring charge.
Excluding certain one-time items, of 98 cents a share, down from a comparable profit of $1.02 a share in the same quarter a year ago. Analysts surveyed by Thomson Financial predicted a profit of 93 cents a share.
Revenues climbed 2.7% to $12.24 billion, edging the consensus target of $12.12 billion.
Volume, which strips out the impact of price and currency, rose 2% in the latest period, led by growth in Dow's performance chemicals and plastics segments, which offset declines in its basic chemicals and energy businesses.
By region, the Midland, Mich., company saw strong demand for its products in Asia, Europe and Latin America, which tempered a slowdown in North America.
Prices for ethylene and propylene, the basic ingredients in plastic products, have tumbled in the past few months due to oversupply in the market. However, falling natural gas and oil prices could mean healthier profit margins in the months ahead.
Dow said feedstock and energy costs are trending lower in 2007, and it expects to see healthy demand and "solid results" in the year ahead.
Dow Chairman and Chief Executive Andrew Liveris said the results demonstrate the "true value" of the company's strategy.
"This was another very strong quarter for Dow, ending a tremendous year for the
company," Liveris said.
Separately, Liveris told CNBC that the company would like to make acquisitions, but the amount of private-equity money floating around has made lots of businesses in the chemical sector expensive.