Why DOW Is Slumping Today

Chemical maker Dow (DOW) is retreating 6% after the company reported weaker-than-expected fourth-quarter financial results and disclosed that it would lay off about 1,500 of its employees in order to cut its costs.

A Look at Dow’s Q4 Results

The company reported Q4 net sales of $10.4 billion, versus analysts’ average estimate of $10.53 billion. Additionally, Dow generated Q4 earnings per share of 0 cents, excluding some items, well below the mean outlook of 24 cents. The firm noted that its net revenue had dropped 2% versus the same period a year earlier, and Dow reported that its top line was undermined by “seasonal declines in (its) Performance Materials & Coatings” business.

A scientist surrounded by a laboratory of chemicals and beakers, developing small molecular therapies.

Dow’s Cost-Cutting Plan

In addition to laying off about 1,500 employees, Dow will look to spend less on “third-party contract labor and purchase services.” The chemical maker is seeking to use these actions to reduce its expenditures by about $1 billion annually by 2026.

Additionally, Dow noted that it had agreed last month to sell “a minority stake in select U.S. Gulf Coast infrastructure assets for expected cash proceeds of up to approximately $3 billion.”

Dow’s Comments

“We remain confident that Dow will benefit from the completion of our near-term incremental growth projects and an enhanced focus on operational discipline in 2025. In addition, we are optimistic that we will see further demand growth in attractive end markets such as packaging, energy and electronics,” CEO Jim Fitterling said in a statement.

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Disclosure: None. This article is originally published at Insider Monkey