Dow Inc. (NYSE:DOW) shares plummeted Thursday after the chemical manufacturer posted a larger-than-expected loss in the second quarter and cut its dividend in half. The company cited persistent macroeconomic pressure, margin compression, and global trade disruptions as reasons for the cutback.
The company reported an adjusted loss of 42 cents per share, wider than Wall Street’s projected 12-cent loss, according to consensus estimates. Revenue fell 7% year over year to $10.104 billion, missing the $10.252 billion estimate.
Dow posted a GAAP net loss of $801 million for the quarter, while operating EBIT swung to a loss of $21 million from $819 million in the same period a year ago.
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Operating cash flow from continuing operations was negative $470 million, a decline of $1.3 billion from the prior year, driven by lower earnings and seasonal working capital needs.
Sales declined across all operating segments. Packaging & Specialty Plastics revenue fell 9% to $5.03 billion, driven by weaker downstream polymer prices.
Industrial Intermediates & Infrastructure revenue declined 6% to $2.78 billion, weighed down by soft demand in construction and mobility.
Performance Materials & Coatings revenue dropped 5% to $2.13 billion, though operating profit improved slightly from the year-ago quarter due to lower input costs and seasonal strength in silicones.
Overall volume decreased 1% year over year, as gains in the U.S. and Canada were offset by declines across Europe, the Middle East, Africa, and India. Local prices fell 7% from the same period last year and 3% sequentially.
Dividend
Dow’s board approved a 50% reduction in its quarterly dividend to 35 cents per share, down from 70 cents. The payout is scheduled for September 12 to shareholders of record as of August 29.
The company said the adjustment reflects a more balanced capital allocation approach and aims to preserve financial flexibility amid industry-wide earnings pressure.
“This quarter, Team Dow advanced several aggressive actions in response to the lower-for-longer earnings environment that our industry is facing, amplified by recent trade and tariff uncertainties,” commented Jim Fitterling, Dow chair and CEO.
“We are delivering near-term cash support and earnings growth levers that we expect will total more than $6 billion by 2026. We are also focused on improving margins and optimizing our global portfolio, as seen in our recent European asset actions.”
Fitterling added that while Dow’s strategic actions are helping mitigate industry volatility, a wave of low-cost exports from new market entrants is distorting competitive dynamics globally. He said the situation calls for broader industry coordination and potential regulatory intervention to restore market balance.
Outlook
Fitterling stated that Dow’s near-term growth projects will become fully operational in the third quarter. These, along with the company’s longer-term investments, are expected to expand Dow’s presence in higher-value applications and less trade-sensitive end markets.
Dow expects third-quarter 2025 net sales of approximately $10.2 billion versus the consensus of $10.599 billion.
- Packaging & Specialty Plastics: Sales up 1%–3% quarter-over-quarter (Q/Q) on stronger integrated margins and Poly-7 ramp-up, offset by maintenance.
- Industrial Intermediates & Infrastructure: Sales up 1% to down 1% Q/Q, with volume gains and reduced maintenance partly offset by lower spreads.
- Performance Materials & Coatings: Sales down 2%–4% Q/Q due to seasonal demand declines and margin pressure in upstream siloxanes.
Company-wide, ongoing cost reductions continue, with depreciation forecast at $725 million, net interest at $175 million, and the operational tax rate at –40% to –60%.
Price Action: At last check Thursday, DOW shares were trading lower by 9.29% to $27.55 premarket.
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