Dow Chemical’s (NYSE:DOW) third-quarter profits slumped by 25%, but the largest U.S. chemical maker’s non-GAAP earnings blew away Wall Street’s expectations and its revenue grew by 6.8%.
Dow said it earned $597 million, or 45 cents a share, last quarter, compared with a profit of $796 million, or 63 cents a share, a year earlier. Excluding one-time items, it earned 54 cents a share, handily beating the Street’s view of 41 cents.
Revenue climbed 6.8% to $12.87 billion, narrowly besting forecasts from analysts for $12.81 billion. Gross margins grew from 13.8% to 15.8%.
Dow said its third-quarter volumes jumped by 14% and prices increased by 9%.
“Continued solid demand recovery in North America and Europe – coupled with sustained momentum in emerging geographies… drove robust revenue gains across all of our operating segments and in every geographic area,” CEO Andrew Liveris said in a statement.
Shareholders cheered the stronger-than-expected results, bidding Dow’s stock up 1.51% to $31.68 in the premarkets on Thursday. The stock had already been up nearly 13% on the year as of Wednesday’s close.
Every segment of Dow’s business posted a revenue increase, led by a 33% surge in sales of basic chemicals to $757 million. Dow revealed sales growth of 19% for its basic plastics unit to $2.6 billion, compared with a 25% rise in performance products sales to $2.6 billion.
Dow said its broad-based growth gives it “confidence that a sustained global economic recovery, led by emerging economies, is firming despite headwinds such as sovereign debt, high unemployment or asset bubble formation.”
Dow also gave an update on its Rohm & Haas acquisition, saying the transaction has exceeded growth synergy targets and delivered $975 million sales on a run-rate basis.