Investors Cheer Dow Chemical Earnings

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Dow Chemical Co. (NYSE: DOW) reported fourth-quarter and full-year 2013 results before markets opened Wednesday, sending shares up sharply in premarket trading.

For the quarter, the diversified chemicals company posted diluted earnings per share (EPS) of $0.65 on revenues of $14.38 billion. In the same period a year ago, the company reported adjusted EPS of $0.33 on revenues of $13.92 billion. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.43 and $14.13 billion in revenues.

For the full year, Dow Chemical posted EPS of $2.48 on revenues of $57.08 billion, compared with consensus estimates calling for EPS of $2.29 on revenues of $56.86 billion. Revenues rose about 3% year-over-year and EPS was up by 31%.

The company’s CEO said:

We generated significant earnings growth, margin expansion and return on capital improvement through Dow-specific actions that gained momentum throughout 2013. Our focus in running a disciplined, integrated strategy, and managing our portfolio with targeted growth and productivity metrics by business and value chain was clearly evident in the quarter demonstrated by the EBITDA gains we achieved across every operating segment. … Our strategy and actions are delivering record cash flow and we remain squarely focused on increasingly rewarding shareholders, funding high-return organic growth projects and further enhancing our capital structure.

Competitor E.I. du Pont de Nemours and Company (NYSE: DD), commonly known as DuPont, reported better-than-expected fourth-quarter results Tuesday, as well as announced a new $5 billion share buyback program.

Dow Chemical did not offer specific guidance, but consensus forecasts so far call for EPS of $0.76 and revenue of $14.80 billion in the current quarter, as well as $2.80 per share and $58.94 billion for the full year.

Dow Chemical shares were up 7.1% in premarket trading, at $46.11 in a 52-week range of $29.81 to $46.85. Thomson Reuters had a consensus analyst price target of around $45.78 before the report.

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