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Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
DOW surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once. It has a trailing four-quarter earnings surprise of 8.2% on average. Dow posted a negative earnings surprise of roughly 5.6% in the last reported quarter.
While DOW is expected to have benefited from its cost and productivity initiatives, soft demand due to weak global economic activities and plant turnaround costs are likely to have affected its third-quarter performance.
Dow’s shares are up 8.2% over a year compared with the Zacks Chemicals Diversified industry’s 12.1% rise.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do DOW’s Revenue Estimates Say?
The Zacks Consensus Estimate for revenues for Dow for the third quarter is currently pegged at $10,769.3 million, suggesting a rise of around 0.9% year over year.
Our estimate for revenues for the Packaging & Specialty Plastics segment is currently pegged at $5,249.5 million, calling for a decline of 3.8% year over year. The same for the Industrial Intermediates & Infrastructure segment stands at $3,039.2 million, roughly flat year-over-year.
Our estimate for revenues for the Performance Materials & Coatings segment is pinned at $2,242.9 million, suggesting a rise of 5.3% year over year.
Factors at Play for Dow Stock
Dow is expected to have faced headwinds from demand softness in Europe and Asia in the quarter to be reported. Lower consumer spending amid inflationary pressures is affecting demand in Europe. Global industrial activities have been affected by the weaker demand recovery in China. The property sector remains sluggish in China with declining new home prices.
Inflationary pressures are impacting consumer durables and building and construction demand. Demand in infrastructure including residential construction remains weak. Soft conditions across these markets are likely to have impacted volumes in the third quarter.
The company is also likely to have faced headwinds from plant turnaround costs in the third quarter. DOW sees a $25 million headwind from higher planned maintenance activities in the third quarter in the U.S. Gulf Coast, impacting the Industrial Intermediates & Infrastructure segment. Also, a turnaround at its St. Charles, LA, cracker is expected to impact the Packaging & Specialty Plastics segment. Dow also expects a major unexpected incident in late July at one of its ethylene crackers in Texas to impact its third-quarter results. Costs related to turnarounds are expected to have weighed on Dow’s margins in the September quarter.
Nevertheless, Dow is expected to have benefited from cost-saving and productivity actions in the third quarter. It remains focused on maintaining cost and operational discipline. DOW is implementing targeted actions focused on optimizing labor and purchased service costs, lowering turnaround spending and boosting productivity. Its targeted actions delivered $1 billion in cost savings for full-year 2023. The benefits of DOW’s restructuring programs are likely to be reflected on its bottom line in the to-be-reported quarter.
Our proven model does not conclusively predict an earnings beat for DOW this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Dow is +3.08%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at 46 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: DOW currently carries a Zacks Rank #5 (Strong Sell).
Basic Materials Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
The consensus estimate for AEM’s earnings for the third quarter is currently pegged at 96 cents.
CF Industries Holdings, Inc. (CF - Free Report) , slated to release earnings on Oct. 30, has an Earnings ESP of +7.08% and carries a Zacks Rank #2 at present.
The consensus mark for CF’s third-quarter earnings is currently pegged at $1.05.
Kinross Gold Corporation (KGC - Free Report) , scheduled to release third-quarter earnings on Nov. 5, has an Earnings ESP of +15.63%.
The Zacks Consensus Estimate for Kinross Gold's earnings for the third quarter is currently pegged at 16 cents. KGC currently carries a Zacks Rank #3.
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Dow Warms Up to Q3 Earnings: What's in the Offing for the Stock?
Dow Inc. (DOW - Free Report) is scheduled to come up with third-quarter 2024 results before the opening bell on Oct. 24.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
DOW surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once. It has a trailing four-quarter earnings surprise of 8.2% on average. Dow posted a negative earnings surprise of roughly 5.6% in the last reported quarter.
While DOW is expected to have benefited from its cost and productivity initiatives, soft demand due to weak global economic activities and plant turnaround costs are likely to have affected its third-quarter performance.
Dow’s shares are up 8.2% over a year compared with the Zacks Chemicals Diversified industry’s 12.1% rise.
Let’s see how things are shaping up for this announcement.
What do DOW’s Revenue Estimates Say?
The Zacks Consensus Estimate for revenues for Dow for the third quarter is currently pegged at $10,769.3 million, suggesting a rise of around 0.9% year over year.
Our estimate for revenues for the Packaging & Specialty Plastics segment is currently pegged at $5,249.5 million, calling for a decline of 3.8% year over year. The same for the Industrial Intermediates & Infrastructure segment stands at $3,039.2 million, roughly flat year-over-year.
Our estimate for revenues for the Performance Materials & Coatings segment is pinned at $2,242.9 million, suggesting a rise of 5.3% year over year.
Factors at Play for Dow Stock
Dow is expected to have faced headwinds from demand softness in Europe and Asia in the quarter to be reported. Lower consumer spending amid inflationary pressures is affecting demand in Europe. Global industrial activities have been affected by the weaker demand recovery in China. The property sector remains sluggish in China with declining new home prices.
Inflationary pressures are impacting consumer durables and building and construction demand. Demand in infrastructure including residential construction remains weak. Soft conditions across these markets are likely to have impacted volumes in the third quarter.
The company is also likely to have faced headwinds from plant turnaround costs in the third quarter. DOW sees a $25 million headwind from higher planned maintenance activities in the third quarter in the U.S. Gulf Coast, impacting the Industrial Intermediates & Infrastructure segment. Also, a turnaround at its St. Charles, LA, cracker is expected to impact the Packaging & Specialty Plastics segment. Dow also expects a major unexpected incident in late July at one of its ethylene crackers in Texas to impact its third-quarter results. Costs related to turnarounds are expected to have weighed on Dow’s margins in the September quarter.
Nevertheless, Dow is expected to have benefited from cost-saving and productivity actions in the third quarter. It remains focused on maintaining cost and operational discipline. DOW is implementing targeted actions focused on optimizing labor and purchased service costs, lowering turnaround spending and boosting productivity. Its targeted actions delivered $1 billion in cost savings for full-year 2023. The benefits of DOW’s restructuring programs are likely to be reflected on its bottom line in the to-be-reported quarter.
Dow Inc. Stock Price and EPS Surprise
Dow Inc. price-eps-surprise | Dow Inc. Quote
What Our Model Unveils for DOW
Our proven model does not conclusively predict an earnings beat for DOW this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Dow is +3.08%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at 46 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: DOW currently carries a Zacks Rank #5 (Strong Sell).
Basic Materials Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Agnico Eagle Mines Limited (AEM - Free Report) , scheduled to release earnings on Oct. 30, has an Earnings ESP of +4.69% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for AEM’s earnings for the third quarter is currently pegged at 96 cents.
CF Industries Holdings, Inc. (CF - Free Report) , slated to release earnings on Oct. 30, has an Earnings ESP of +7.08% and carries a Zacks Rank #2 at present.
The consensus mark for CF’s third-quarter earnings is currently pegged at $1.05.
Kinross Gold Corporation (KGC - Free Report) , scheduled to release third-quarter earnings on Nov. 5, has an Earnings ESP of +15.63%.
The Zacks Consensus Estimate for Kinross Gold's earnings for the third quarter is currently pegged at 16 cents. KGC currently carries a Zacks Rank #3.