3Q25 FINANCIAL HIGHLIGHTS
• Net sales were $10.0 billion, down 8% year-over-year, reflecting declines in all operating segments. Sequentially, net sales were down 1%, as gains in Industrial Intermediates & Infrastructure were more than offset by declines in Packaging & Specialty Plastics and Performance Materials & Coatings.
• Volume decreased 1% year-over-year, as declines in Europe, the Middle East, Africa and India (EMEAI) were partly offset by gains in the U.S. and Canada and Asia Pacific. Sequentially, volume increased 1%, following the startup of Dow’s new assets in the U.S. Gulf Coast. Gains in Industrial Intermediates & Infrastructure were partly offset by declines in Packaging & Specialty Plastics due to lower merchant hydrocarbons sales.
• Local price was down 8% versus the year-ago period and down 3% sequentially.
• GAAP net income was $124 million. Op. EBIT1 was $180 million, down $461 million year-over-year. This was primarily driven by declines in price and equity earnings, which were partly offset by tailwinds from the Company’s cost reduction actions. Sequentially, Op. EBIT increased $201 million, driven by meaningful cost reduction progress and lower planned maintenance activity, which were partly offset by lower prices across all operating segments.
• GAAP earnings per share (EPS) was $0.08; operating EPS1 was a loss of $0.19, compared to EPS of $0.47 in the year-ago period and a loss of $0.42 in the prior quarter. Op. EPS excludes significant items totaling $0.27 per share, primarily driven by one-time favorable tax adjustments and gains from the Company’s sale of its 50% interest in the DowAksa joint venture.
• Cash provided by operating activities – continuing operations was $1.1 billion, up $330 million year-over-year, driven by working capital improvements. Sequentially, it was up $1.6 billion, primarily driven by working capital improvements and advance payments for low carbon solutions and other long-term supply agreements.
• Returns to shareholders totaled $249 million of dividends in the quarter.
SUMMARY FINANCIAL RESULTS
1. Op. Earnings Per Share, Op. EBIT, Op. EBIT Margin and Op. EBITDA, Free Cash Flow and Cash Flow Conversion are non-GAAP measures. See page 6 for further discussion.
CEO QUOTE
“In the third quarter, we delivered sequential earnings and cash flow improvement despite continued pressure across our industry,” said Jim Fitterling, Dow chair and CEO. “Our teams are engaging in productive conversations with governments around the world to keep product moving and to ensure a fair-trade environment. We remain confident that Dow is in a strong position to navigate this environment. Additionally, we captured resilient demand from our new polyethylene and alkoxylation assets in the U.S. Gulf Coast, delivering sequential volume and earnings growth in key end markets at higher margins. We remain on track to deliver more than $6.5 billion in near-term cash support, with over half already achieved. This includes a reduction in CapEx spending of $1 billion this year, as well as the accelerated delivery of our previously announced $1 billion in targeted cost reductions by the end of 2026. Our performance demonstrates the strength of Dow’s competitive advantages and our disciplined focus on key value drivers within our control.”
SEGMENT HIGHLIGHTS
Packaging & Specialty Plastics
Packaging & Specialty Plastics segment net sales in the quarter were $4.9 billion, down 11% versus the year-ago period1 . Local price decreased 10% year-over-year, primarily driven by lower downstream polymer prices. Currency increased net sales by 1%. Volume decreased 1% year-over-year, driven by lower licensing revenue and merchant olefins sales, partly offset by higher polyethylene volumes. On a sequential basis, net sales declined, primarily driven by lower prices for downstream polymers and olefins.
Equity losses for the segment were $6 million, a decrease of $22 million compared to the prior year, due to lower integrated margins at the Kuwait joint ventures and lower supply availability at Sadara as the result of an unplanned event in July. The impacted asset is currently back up and running. Sequentially, equity earnings decreased by $13 million, primarily driven by higher losses at Sadara.
Op. EBIT was $199 million, a decrease of $419 million compared to the year-ago period, primarily driven by lower integrated margins. Sequentially, Op. EBIT increased by $128 million, driven by higher integrated margins and operating rates, our new polyethylene unit in Freeport, TX, and lower fixed costs.
Packaging and Specialty Plastics business reported a net sales decrease versus the year-ago period, driven by lower downstream polymer prices and lower licensing revenue, partly offset by higher demand for flexible packaging applications. Sequentially, net sales were flat, as higher demand for flexible packaging was offset by lower prices.
Hydrocarbons & Energy business reported a net sales decrease both year-over-year and sequentially, driven by lower merchant olefins sales in EMEAI.
Industrial Intermediates & Infrastructure
Industrial Intermediates & Infrastructure segment net sales were $2.8 billion, down 4% versus the year-ago period. Local price declined 8% year-over-year, reflecting decreases in both businesses. Currency increased net sales by 2%. Volume increased 2% year-over-year, driven by higher volumes in the U.S. and Canada in both businesses. On a sequential basis, net sales increased 2% as volume gains in all regions were partly offset by lower prices.
Equity losses for the segment were $68 million, compared to equity losses of $17 million in the year-ago period, primarily driven by lower integrated margins at Sadara and the Kuwait joint ventures. Equity losses in the prior quarter were $39 million. Sequentially, the earnings decline was driven by higher losses at Sadara following the previously mentioned unplanned event in July.
Op. EBIT increased $6 million versus the year-ago period, driven by higher operating rates and lower fixed costs, partly offset by lower prices. On a sequential basis, Op. EBIT increased by $138 million, driven by lower planned maintenance activity and higher volumes in both businesses, supported by the startup of the new alkoxylation unit in Seadrift, TX.
Polyurethanes & Construction Chemicals business reported a decrease in net sales compared to the year-ago period, primarily driven by local price and volume declines, partly offset by increased MDI volumes following a third-party supplier outage in the prior period. Sequentially, net sales increased as higher volumes, primarily in MDI, were partly offset by lower prices in EMEAI.
Industrial Solutions business reported a decrease in net sales compared to the year-ago period, primarily driven by lower local prices, partly offset by higher volumes, led by energy applications, including solutions for data centers. Sequentially, net sales increased, driven by higher volumes from improved supply availability following turnaround activity in the prior period and the startup of our new unit in Seadrift, TX, which partly offset price declines. The new alkoxylation unit targets more resilient home and personal care end markets.
Performance Materials & Coatings
Performance Materials & Coatings segment net sales in the quarter were $2.1 billion, down 6% versus the yearago period. Local price decreased 5% year-over-year, driven by declines in both businesses. Currency increased net sales by 1%. Volume was down 2% year-over-year, primarily driven by lower volumes in Consumer Solutions, led by upstream siloxanes. On a sequential basis, net sales were down 2% driven by lower prices and seasonally lower demand for coatings applications, partly offset by volume gains in Consumer Solutions.
Op. EBIT decreased $60 million versus the year-ago period, driven primarily by lower prices, partly offset by lower fixed costs. Sequentially, Op. EBIT decreased $72 million, driven by margin compression, led by upstream siloxanes, and seasonally lower volumes, partly offset by lower fixed costs.
Consumer Solutions business reported a decrease in net sales versus the year-ago period, as higher demand for downstream electronics and home care applications was more than offset by lower prices across the business and lower upstream siloxanes volumes. Sequentially, net sales increased, driven by higher demand for both upstream siloxanes and downstream silicones, partly offset by lower prices.
Coatings & Performance Monomers business reported a decrease in net sales compared to the year-ago period, driven by lower prices, led by declines in acrylic monomers. Sequentially, net sales decreased, primarily driven by seasonally lower demand as well as lower prices, primarily in acrylic monomers.
OUTLOOK
“Our teams are staying close to our customers, maintaining the financial flexibility we have built, and strengthening Dow’s competitiveness to drive higher earnings,” said Fitterling. “While the near-term market backdrop remains largely unchanged across the end markets Dow serves, we continue to take actions to build on our strong foundation and enable greater long-term shareholder returns when macroeconomic conditions improve. We are focused on resilient areas of our portfolio where we can capture share and premiums. And, we are delivering increased cost savings, rationalizing higher-cost areas of our asset footprint - primarily in Europe - and applying a disciplined approach to our balance sheet and cash flow. As we have demonstrated, we are committed to identifying and implementing additional targeted initiatives designed to enhance Dow’s earnings and further optimize our cost structure.”
Source: DOW
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