DOW Chemical Co, the largest United States chemical maker, said fourth-quarter earnings fell 52 percent because costs for oil and gas-based raw materials outpaced price gains.
Net income dropped to US$472 million, or 49 cents a share, from US$975 million, or US$1, a year earlier, Midland, Michigan-based Dow said yesterday. Profit excluding some costs was 84 cents, topping the 80-cent average estimate of 14 analysts surveyed by Bloomberg News.
Dow, which makes 3,200 products ranging from synthetic latex to pesticides, is divesting petroleum-based lines as crude oil trades near record highs. Price gains in the quarter failed to fully recoup US$1.7 billion in higher costs for raw materials and energy, Dow said. Sales rose 16 percent to a record US$14.2 billion.
"With pricing gains not keeping pace with steadily rising feedstock costs, we expect commodity-chemical earnings to contract," said David Begleiter of Deutsche Bank Securities.
Dow Chemical rose US$1.28, or 3.5 percent, to US$37.59 in Monday in New York Stock Exchange composite trading.