Dow Chemical Co reported a better-than-expected quarterly profit as sales rose and margins improved due to higher prices and a tight control on costs.
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The company said margins improved in four of its six units, aided in part by lower costs for ethane, used in making ethylene and plastics.
Dow, which makes everything from insecticides to plastics, said sales rose across all six of its businesses in the quarter ended June 30.
"It was a solid quarter all around and I think it caught some people by surprise because of the leverage they saw to commodity prices," said Stephen Hoedt, senior equity research analyst with Key Private Bank.
Dow Chemical's shares were up 1.2 percent at $52.91 in early trading.
Activist investor Daniel Loeb's Third Point has urged Dow to separate its commoditized raw materials businesses from its specialty chemicals operations - demands that Dow has repeatedly rejected.
Dow says that its raw materials units help keep costs down in the high-growth specialty chemicals used in agriculture, food and electronics – an argument reinforced by Chief Executive Andrew Liveris on Wednesday.
"The inputs and the outputs are very linked. We have explained that in great detail to every investor, including Third Point," Liveris told Reuters.
The company's agriculture business and the feedstocks and energy division were the two exceptions to margin growth in the quarter. Dow has said it may look at restructuring the feedstocks and energy unit.
"It is clear to us that the feedstock piece of it can be crafted differently and we are putting in a lot of work into that," Liveris said.
Dow plans to raise as much as $6 billion from non-core asset sales by the end of 2015 and has put its epoxy business and some chlorine and derivatives assets up for sale.
It is also looking to shed non-core businesses in its functional materials and performance materials units.
Rival DuPont and a number of other chemical makers are facing increasing investor pressure to divest volatile businesses and return more money to shareholders.
DuPont, which is more exposed to farm sales, reported lower-than-expected quarterly revenue on Tuesday, hurt by weak demand for corn seeds.
Dow's net income available for common stockholders fell 62 percent to $882 million, or 73 cents per share.
The year-earlier quarter included a gain of $2.2 billion paid by Kuwait's state chemical company as damages for pulling out of a petrochemical venture in 2008.
Adjusted profit was 74 cents per share, beating the average analysts' estimate of 72 cents, according to Thomson Reuters I/B/E/S.
Revenue rose 2 percent to $14.92 billion, slightly above the average analysts' estimate of $14.82 billion.
Dow Chemical's shares have risen more than 50 percent in the last year.
The stock trades at 17.76 times forward earnings, above 16.12 times for DuPont, but below an average of 19.75 times for the chemical industry.