Dow Chemical 4Q profit beats estimates

GRAND RAPIDS, Mich. - Dow Chemical Co. said Tuesday its fourth-quarter earnings fell 52 percent due to restructuring and a $1.7 billion rise in spending on materials and energy, the largest year-over-year cost increase in company history.

Net income fell to $472 million, or 49 cents per share, from $975 million, or $1 per share, in the 2006 fourth quarter. Excluding one-time restructuring charges and acquisition-related research and development costs of $334 million, the company earned 84 cents per share in the latest period, down from 98 cents a year ago.

The results topped estimates of analysts surveyed by Thomson Financial, who expected a profit of 80 cents per share on revenue of $13.08 billion.

Andrew N. Liveris, Dow's chairman and chief executive, said in a statement it was "a quarter in which our entire organization responded with speed and discipline to an unprecedented run-up" in the costs of energy and raw materials.

Midland-based Dow raised prices "to mitigate much of the $1.7 billion year-over-year increase," he said.

Sales grew 16 percent to $14.23 billion from $12.24 billion a year ago, with volumes up 4 percent on strong international growth.

The company's performance underscored the value of its joint ventures in its overall strategy, Liveris said.

"With two-thirds of our sales outside of the United States, we were well placed to capture growth opportunities around the world," he said.

Net income for all of 2007 was $2.9 billion, or $2.99 per share, compared with $3.7 billion, or $3.82 per share, in 2006. Excluding certain charges in both periods, earnings per share were $3.76 in 2007, down from $4.25 in 2006.

Dow reported annual sales of $53.5 billion last year, up 9 percent from $49.1 billion in 2006.

Liveris called 2007 a strong year for the company, its third-best earnings year ever, despite higher costs for energy and raw materials. Dow spent $24.6 billion on these costs, three times as much as in 2002.

While there is some uncertainty about the U.S. economy in 2008, Dow's global growth and investment in joint ventures "is expected to bring another solid year of earnings for Dow," he said.

Shares rose 66 cents to $38.25 in pre-market trading.