Dow Reports Q3 Earnings

FINANCIAL HIGHLIGHTS

• Net sales were $11.3 billion, up 13% year-over-year, reflecting increases in all operating segments.
• Local price increased 14% versus the year-ago period, led by gains in Packaging & Specialty Plastics, with higher polyethylene prices in all regions. Currency was flat year-over-year.
• Volume decreased 1% year-over-year. This reflects higher volumes in all regions except Asia Pacific, where impacts from the Middle East conflict are most pronounced.   
• GAAP net income was $525 million. Operating EBIT¹ was $887 million, up $707 million year-over-year, primarily driven by higher prices as well as benefits from the Company's collective self-help actions, which more than offset higher raw materials and logistics costs.
• GAAP earnings per share (EPS) was $0.62; operating EPS¹ was $0.71, compared to a loss of $0.19 in the year-ago period. Op. EPS excludes significant items totaling $0.09 per share, primarily driven by costs associated with the Company's collective self-help actions.  
• Cash provided by operating activities – continuing operations was $1.8 billion, up $709 million year-over-year, reflecting improved earnings and working capital, and up $515 million sequentially, primarily reflecting working capital improvements. Free cash flow¹ was $1.1 billion, with trailing twelve-month cash flow conversion¹ of 84%.
• Returns to shareholders totaled $253 million of dividends in the quarter.

CEO QUOTE

"Dow delivered a solid third quarter, driven by targeted downstream growth and disciplined execution against an evolving macro backdrop," said Karen S. Carter, Dow chief executive officer. "Our teams are delivering on our unique-to-Dow self-help commitments – including our 2025 $1 billion cost program, our European asset actions, and Transform to Outperform. Specific to the transformation, we are on track to achieve the upsized $700 million in growth and productivity benefits in 2026, as well as the approximately $2 billion in total uplift by the end of next year. In addition, we captured sequential gains from the first of our three European asset shutdowns, where the total benefits are expected to build through 2027. We also remain focused on cash, including releasing more than $400 million of working capital during the quarter and reducing debt by approximately $600 million year-to-date. Our near-term actions are building a Dow that delivers stronger, more consistent results and long-term value for our shareholders."  

SUMMARY FINANCIAL RESULTS

SEGMENT HIGHLIGHTS

Packaging & Specialty Plastics

Packaging & Specialty Plastics segment net sales in the quarter were $5.8 billion, up 18% versus the year-ago period. Local price increased 17% year-over-year, primarily driven by higher prices across both businesses in EMEAI and the U.S. & Canada. Currency was flat. Volume increased 1% year-over-year, primarily driven by increases in EMEAI in both businesses.

Op. EBIT was $585 million, an increase of $386 million compared to the year-ago period, driven by higher integrated margins as a result of higher polyethylene prices and tailwinds from the Company's self-help initiatives, which were partly offset by higher planned maintenance activity.

Packaging and Specialty Plastics business reported a net sales increase versus the year-ago period, driven by higher polyethylene and functional polymers prices in all regions. Polyethylene demand remained resilient, with year-over-year volume growth excluding supply constraints associated with the Middle East conflict.                           

Hydrocarbons & Energy business reported a year-over-year increase in net sales, with higher price and volume for Olefins and Aromatics in EMEAI, enabled by the restart of our previously idled cracker in the region.

Industrial Intermediates & Infrastructure

Industrial Intermediates & Infrastructure segment net sales in the quarter were $3.1 billion, up 8% versus the year-ago period. Local price increased 16% year-over-year, reflecting gains in both businesses and in all regions. Currency decreased net sales by 1%. Volume decreased 7% year-over-year, as higher volumes in Industrial Solutions were more than offset by lower volumes in Polyurethanes & Construction Chemicals, including impacts from the Middle East conflict in both businesses. 

Op. EBIT was $176 million, an increase of $223 million versus the year-ago period, driven by higher margins, tailwinds from the Company's self-help initiatives and the suspension of the recognition of equity losses from Sadara, all of which were partially offset by higher energy costs in EMEAI.

Polyurethanes & Construction Chemicals business reported an increase in net sales compared to the year-ago period, primarily driven by local price gains in propylene oxide derivatives in the U.S. & Canada and EMEAI. This was partially offset by lower volumes, which primarily reflect impacts from the Middle East conflict.

Industrial Solutions business reported an increase in net sales compared to the year-ago period, driven by local price gains in all regions. Volume growth was driven by increased demand for AI infrastructure and energy applications, as well as higher ethylene oxide project-related catalyst sales.

Performance Materials & Coatings

Performance Materials & Coatings segment net sales in the quarter were $2.3 billion, up 8% versus the year-ago period. Local price increased 5% year-over-year in both businesses, led by Coatings & Performance Monomers. Currency was flat. Volume increased 3% year-over-year, driven by higher volumes in both businesses, led by growth in downstream silicones.

Op. EBIT was $154 million, an increase of $74 million versus the year-ago period, driven by tailwinds from the Company's self-help initiatives, including the closure of the Barry, U.K. siloxanes plant, as well as price and volume gains across both businesses.

Consumer Solutions business reported an increase in net sales versus the year-ago period, driven by downstream silicones volume gains in all regions, as growth in consumer, electronics and home care applications more than offset upstream volume declines following the recent shutdown of the Barry, U.K. siloxanes plant.

Coatings & Performance Monomers business reported an increase in net sales across all regions compared to the year-ago period, led by higher price and volume in both acrylic monomers and architectural coatings.

OUTLOOK

"We are building a more resilient and competitive Dow that is positioned to create long-term value through our continued focus on three priorities," said Carter. "First, driving growth and innovation in higher-value areas of our businesses where demand is growing well above GDP – including applications for AI infrastructure, home and personal care, electronics, flexible packaging and mobility. Second, we are taking action to strengthen the competitiveness of Dow's portfolio by investing in differentiated low-cost positions while shutting down higher-cost upstream capacity. And third, we're maintaining a disciplined and balanced approach to capital allocation that supports long-term shareholder value creation. These priorities are underpinned by our self-help actions, which are on track to deliver more than $1 billion of EBITDA uplift in both 2026 and 2027."  

Conference Call

Dow will host a live webcast of its quarterly earnings conference call with investors to discuss its results, business outlook and other matters today at 8:00 a.m. ET. The webcast and slide presentation that accompany the conference call will be posted on the events and presentations page of investors.dow.com.

About Dow

Dow (NYSE: DOW) is one of the world's leading materials science companies, serving customers in high-growth markets such as packaging, infrastructure, mobility and consumer applications. Our global breadth, asset integration and scale, customer-focused innovation and leading business positions enable us to achieve profitable growth and help deliver a sustainable future. We operate manufacturing sites in 29 countries and employed approximately 34,600 people as of year-end 2025. Dow delivered sales of approximately $40 billion in 2025. References to Dow or the Company mean Dow Inc. and its subsidiaries. Learn more about us at www.dow.com.

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Cautionary Statement about Forward-Looking Statements 

Certain statements in this press release are "forward-looking statements" within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements often address expected future business and financial performance, financial condition, and other matters, and often contain words or phrases such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "opportunity," "outlook," "plan," "project," "seek," "should," "strategy," "target," "will," "will be," "will continue," "will likely result," "would" and similar expressions, and variations or negatives of these words or phrases.

Forward-looking statements are based on current assumptions and expectations of future events that are subject to risks, uncertainties and other factors that are beyond Dow's control, which may cause actual results to differ materially from those projected, anticipated or implied in the forward-looking statements and speak only as of the date the statements were made. These factors include, but are not limited to: sales of Dow's products; Dow's expenses, future revenues and profitability; any supply chain, operational or other disruptions, sanctions, export restrictions, or increased economic uncertainty related to the ongoing conflicts between Russia and Ukraine and in the Middle East; capital requirements and need for and availability of financing; unexpected barriers in the development of technology, including with respect to Dow's contemplated capital and operating projects; Dow's ability to realize its commitment to carbon neutrality on the contemplated timeframe, including the completion and success of its integrated ethylene cracker and derivatives facility in Alberta, Canada; size of the markets for Dow's products and services and ability to compete in such markets; Dow's ability to develop and market new products and optimally manage product life cycles; the rate and degree of market acceptance of Dow's products; significant litigation and environmental matters and related contingencies and unexpected expenses; the success of competing technologies that are or may become available; the ability to protect Dow's intellectual property in the United States and abroad; Dow's ability to realize expected benefits from Transform to Outperform on the contemplated timeframe; developments related to contemplated restructuring activities and proposed divestitures or acquisitions such as workforce reduction, manufacturing facility and/or asset closure and related exit and disposal activities, and the benefits and costs associated with each of the foregoing; fluctuations in energy and raw material prices; management of process safety and product stewardship; changes in relationships with Dow's significant customers and suppliers; changes in public sentiment and political leadership; increased concerns about plastics in the environment and lack of a circular economy for plastics at scale; changes in consumer preferences and demand; changes in laws and regulations, political conditions, tariffs and trade policies, or industry development; global economic and capital markets conditions, such as inflation, market uncertainty, interest and currency exchange rates, and equity and commodity prices; business, logistics and supply disruptions; security threats, such as acts of sabotage, terrorism or war, including the ongoing conflicts between Russia and Ukraine and in the Middle East; weather events and natural disasters; disruptions in Dow's information technology networks and systems, including the impact of cyberattacks; risks related to Dow's separation from DowDuPont Inc. such as Dow's obligation to indemnify DuPont de Nemours, Inc. and/or Corteva, Inc. for certain liabilities; and any global and regional economic impacts of a pandemic or other public health-related risks and events on Dow's business.

Where, in any forward-looking statement, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of management and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. A detailed discussion of principal risks and uncertainties which may cause actual results and events to differ materially from such forward-looking statements is included in the section titled "Risk Factors" contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, and the Company's subsequent reports filed with the U.S. Securities and Exchange Commission. These are not the only risks and uncertainties that Dow faces. There may be other risks and uncertainties that Dow is unable to identify at this time or that Dow does not currently expect to have a material impact on its business. If any of those risks or uncertainties develops into an actual event, it could have a material adverse effect on Dow's business. Dow Inc. and The Dow Chemical Company and its consolidated subsidiaries assume no obligation to update or revise publicly any forward-looking statements whether because of new information, future events, or otherwise, except as required by securities and other applicable laws.

^®TM Trademark of The Dow Chemical Company or an affiliated company of Dow 

Non-GAAP Financial Measures

This earnings release includes information that does not conform to GAAP and are considered non-GAAP measures. Management uses these measures internally for planning, forecasting and evaluating the performance of the Company's segments, including allocating resources. Dow's management believes that these non-GAAP measures best reflect the ongoing performance of the Company during the periods presented and provide more relevant and meaningful information to investors as they provide insight with respect to ongoing operating results of the Company and a more useful comparison of year-over-year results. These non-GAAP measures supplement the Company's GAAP disclosures and should not be viewed as alternatives to GAAP measures of performance. Furthermore, such non-GAAP measures may not be consistent with similar measures provided or used by other companies. Non-GAAP measures included in this release are defined below. Reconciliations for these non-GAAP measures to GAAP are provided in the Selected Financial Information and Non-GAAP Measures section starting on page 10. Dow does not provide forward-looking GAAP financial measures or a reconciliation of forward-looking non-GAAP financial measures to the most comparable GAAP financial measures on a forward-looking basis because the Company is unable to predict with reasonable certainty the ultimate outcome of pending litigation, unusual gains and losses, foreign currency exchange gains or losses and potential future asset impairments, as well as discrete taxable events, without unreasonable effort. These items are uncertain, depend on various factors, and could have a material impact on GAAP results for the guidance period.

Operating Earnings Per Share is defined as "Earnings (loss) per common share - diluted" excluding the after-tax impact of significant items.

Operating EBIT is defined as earnings (i.e., "Income (loss) before income taxes") before interest, excluding the impact of significant items.

Operating EBIT Margin is defined as Operating EBIT as a percentage of net sales.

Operating EBITDA is defined as earnings (i.e., "Income (loss) before income taxes") before interest, depreciation and amortization, excluding the impact of significant items.

Free Cash Flow is defined as "Cash provided by operating activities - continuing operations," less capital expenditures. Under this definition, Free Cash Flow represents the cash generated by the Company from operations after investing in its asset base. Free Cash Flow, combined with cash balances and other sources of liquidity, represent the cash available to fund obligations and provide returns to shareholders. Free Cash Flow is an integral financial measure used in the Company's financial planning process.

Cash Flow Conversion is defined as "Cash provided by operating activities - continuing operations," divided by Operating EBITDA. Management believes Cash Flow Conversion is an important financial metric as it helps the Company determine how efficiently it is converting its earnings into cash flow.

Operating Return on Capital (ROC) is defined as net operating profit after tax, excluding the impact of significant items, divided by total average capital, also referred to as ROIC.

 

 

 

 

1. Europe, Middle East, Africa and India. 

 

1. Packaging & Specialty Plastics and Industrial Intermediates & Infrastructure include losses of $81 million and $211 million, respectively, in the nine months ended September 30, 2026, related to the Sadara guarantee liability adjustment, a significant item. 

 

 

1. "Income before income taxes."
2. "Net income (loss) available for Dow Inc. common stockholders." The income tax effect on significant items was calculated based upon the enacted tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.
3. "Earnings per common share - diluted," which includes the impact of participating securities in accordance with the two-class method.
4. Includes costs to achieve of $60 million and severance and related benefit costs of $9 million associated with Transform to Outperform.
5. Relates to a gain associated with a legal matter with Nova Chemicals Corporation ("Nova").
6. Includes severance and related benefit costs and impairment charges related to the write-down of certain manufacturing facilities, corporate assets, leased non-manufacturing facilities and other miscellaneous assets associated with the Company's 2025 Restructuring Program.
7. Includes implementation costs associated with the Company's 2025 Restructuring Program and the sale of membership interests of the Company's formerly wholly owned subsidiary, Dow InfraCo, LLC.
8. Relates to a gain on the sale of the Company's ownership interest in a nonconsolidated affiliate.
9. Relates to a tax benefit stemming from the U.S. Tax Court's decision in Varian Medical Systems Inc. v. Commissioner and a tax basis adjustment related to the Company's consolidated infrastructure entity, Dow InfraCo, LLC. 

 

1. "Income before income taxes."
2. "Net income available for Dow Inc. common stockholders." The income tax effect on significant items was calculated based upon the enacted tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.
3. "Earnings per common share - diluted," which includes the impact of participating securities in accordance with the two-class method.
4. Includes costs to achieve of $194 million and severance and related benefit costs of $481 million associated with Transform to Outperform.
5. Includes impairment charges related to the write-down of certain manufacturing facilities and other miscellaneous assets and exit and disposal costs associated with the Company's 2025 Restructuring Program.
6. Includes a charge due to a change in fair value of the estimated liability associated with the Company's guarantee of Sadara's project financing debt.
7. Relates to a gain associated with a legal matter with Nova.
8. Relates to credits associated with agreements entered into with DuPont and Corteva as part of the separation and distribution which, among other matters, provides for cross-indemnities and allocations of obligations and liabilities for periods prior to, at and after the completion of the separation.

 

1. "Income (loss) before income taxes."
2. "Net income (loss) available for Dow Inc. common stockholders." The income tax effect on significant items was calculated based upon the enacted tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.
3. "Earnings (loss) per common share - diluted," which includes the impact of participating securities in accordance with the two-class method.
4. Includes restructuring implementation and efficiency costs associated with the Company's 2023 Restructuring Program and the write-down of certain manufacturing assets, partially offset by an asset related credit adjustment.
5. Includes severance and related benefit costs and impairment charges related to the write-down of certain manufacturing facilities, corporate assets, leased non-manufacturing facilities and other miscellaneous assets associated with the Company's 2025 Restructuring Program.
6. Includes implementation costs associated with the Company's 2025 Restructuring Program and the sale of membership interests of the Company's formerly wholly owned subsidiary, Dow InfraCo, LLC.
7. Relates to a gain on the sale of the Company's soil fumigation product line and a gain on the sale of the Company's ownership interest in a nonconsolidated affiliate.
8. Includes a gain associated with the reassessment of liabilities for certain accrued legacy agricultural products groundwater contamination matters, partially offset by the settlement of a separate claim related to water storage district legacy groundwater contamination matters.
9. Includes a charge related to an arbitration settlement agreement for historical product claims from a divested business and charges associated with agreements entered into with DuPont and Corteva as part of the separation and distribution which, among other matters, provides for cross-indemnities and allocations of obligations and liabilities for periods prior to, at and after the completion of the separation.
10. Relates to valuation allowances on deferred tax assets in certain foreign jurisdictions, partially offset by a tax benefit stemming from the U.S. Tax Court's decision in Varian Medical Systems Inc. v. Commissioner and tax basis adjustments related to the Company's consolidated infrastructure entity, Dow InfraCo, LLC.

 

 

1. Cash flow from operations to net income is not applicable for the fourth quarter of 2025 and first quarter of 2026 due to a net loss for the period.
2. Cash flow from operations to net income - trailing twelve months is not applicable due to a net loss for the trailing twelve months period.