Earnings Reports Overview - The earnings reports of major companies, including Caterpillar Inc (CAT) and Microsoft Corp (MSFT), are currently under scrutiny as they have recently released their financial results [1] Microsoft Corp (MSFT) - MSFT experienced a significant decline of 6%, trading at $416.03, marking its worst day since October and its fourth loss in five days [2] - Despite beating both top- and bottom-line estimates in its fiscal second quarter, MSFT provided a disappointing outlook for cloud growth and justified increased spending on artificial intelligence (AI) [2] - Following the earnings report, MSFT faced six price-target cuts, with BMO reducing its target from $510 to $500, making it the biggest loser on the Dow [3] - MSFT is also the second most-traded stock in options markets, with a notable interest in the weekly 1/31 420-strike call options [3] Caterpillar Inc (CAT) - CAT's stock fell by 4.3% to $376.12, despite reporting a profit beat for the fourth quarter, as it missed revenue expectations and lowered its sales forecast for 2025 [4] - The stock struggled to break through the $410 level in previous sessions, reflecting ongoing pressure since November [4] - CAT is experiencing its worst single-day percentage drop since September, although it still shows a year-over-year gain of 25.5% [4] - Options traders have shown a preference for calls, as indicated by CAT's 50-day call/put volume ratio of 1.54, which is higher than all other annual readings [5]

Core Viewpoint - Dow Inc. reported a narrower loss in Q4 2024 compared to the previous year, but missed earnings estimates and faced declining sales due to macroeconomic challenges [1][2][10]. Financial Performance - Dow recorded a loss of $53 million or 8 cents per share in Q4 2024, an improvement from a loss of $105 million or 15 cents per share in Q4 2023 [1]. - Adjusted earnings per share were break-even, down from 43 cents a year ago, missing the Zacks Consensus Estimate of 23 cents [1][2]. - Net sales for the quarter were $10,405 million, a 2% decrease year over year, and below the Zacks Consensus Estimate of $10,427.5 million [2]. - For the full year 2024, revenues totaled $43 billion, down approximately 4% year over year, while earnings per share increased to $1.57 from 82 cents in the previous year [7]. Segment Performance - **Packaging & Specialty Plastics**: Sales fell 6% year over year to $5,315 million, below the estimate of $5,525.4 million, with volumes down 1% [4]. - **Industrial Intermediates & Infrastructure**: Sales were flat at $2,948 million, below the estimate of $2,961.9 million, with local prices down 1% [5]. - **Performance Materials & Coatings**: Revenues rose 4% year over year to $1,965 million, below the estimate of $2,055.9 million, with volumes increasing by 5% [6]. Cash Flow and Shareholder Returns - Cash and cash equivalents at the end of 2024 were $2,189 million, a decrease of around 27% from the prior year [8]. - Long-term debt increased to $15,711 million, up approximately 5% year over year [8]. - The company returned $492 million to shareholders in Q4 2024, totaling $2.5 billion for the year, which included $2 billion in dividends and $0.5 billion in share buybacks [9]. Future Outlook - Dow expects to benefit from the completion of growth projects and an increased focus on operational discipline in 2025, anticipating demand growth in packaging, energy, and electronics [10]. - The company plans to cut costs by $1 billion, including a workforce reduction of around 1,500 roles globally, and reduce capital spending plans by $300-$500 million in response to macroeconomic challenges [11]. Stock Performance - Dow's shares have declined by 23.4% over the past year, contrasting with a 0.2% decline in the Zacks Chemicals Diversified industry [12].

4Q 2024 RESULTS January 30, 2025 AGENDA 2 ▪ QUARTERLY AND FULL YEAR RESULTS ▪ OPERATING SEGMENT PERFORMANCE ▪ OUTLOOK ▪ ADVANCING OUR STRATEGIC PRIORITIES 4Q 2024 PERFORMANCE OVERVIEW Preserving Operational and Financial Discipline Through Challenging Macroeconomic Conditions Optimizing Our Portfolio for Growth $10.4B N E T S A L E S $454MM O P E R AT I N G E B I T $811MM O P E R AT I N G C A S H F L O W ¹ $492MM S H A R E H O L D E R R E M U N E R AT I O N Non-GAAP measures are defined in the appendix 1. C ...

Earnings Call Overview - Dow Inc held its Q4 2024 earnings conference call on January 30, 2025, with key executives including Chairman and CEO Jim Fitterling, CFO Jeff Tate, and newly appointed COO Karen S Carter [1][3] - The call was led by Andrew Riker, VP of Investor Relations, and included participation from analysts at major financial institutions such as Morgan Stanley, Wells Fargo, and JPMorgan [1][2] Financial Reporting Details - The company provided accompanying slides for the earnings call, which were accessible through the webcast and posted on Dow's website [3] - Financial figures discussed during the call excluded significant items unless otherwise specified, and non-GAAP measures were referenced [4] Forward-Looking Statements - The company's comments during the call contained forward-looking statements, with cautionary notes referenced in the earnings news release and slides [4] - Additional information about principal risks and uncertainties was available in Dow's public filings [4]

Core Insights - Dow reported disappointing earnings for Q4 2024, with adjusted EPS of $0, missing analysts' expectations of $0.24, and total revenue of $10.4 billion, below the forecast of $10.51 billion, reflecting a challenging macroeconomic environment [2][3] Financial Performance - Adjusted EPS for Q4 2024 was $0, a 100% decrease from $0.43 in Q4 2023 [3] - Total revenue was $10.4 billion, down 2.1% from $10.62 billion in Q4 2023 [3] - Operating EBIT decreased to $454 million, an 18.8% decline from $559 million in the previous year [3] - Cash from operations fell by 50.2% to $811 million, compared to $1.63 billion in Q4 2023 [3] Business Overview - Dow operates in various segments including packaging & specialty plastics, industrial intermediates & infrastructure, and performance materials & coatings, which helps mitigate market risks through diversification [4] - The company is focusing on sustainability and innovation, with projects aimed at achieving net-zero emissions [5] Segment Performance - The packaging & specialty plastics segment, which constitutes over half of Dow's revenue, saw a 6% year-over-year decline in net sales due to lower pricing in Asia Pacific [6] - Industrial intermediates & infrastructure maintained stable net sales, with EBIT improving by $69 million [6] - Performance materials & coatings experienced a 4% increase in net sales year-over-year, although there was an 11% sequential decline [7] Macroeconomic Challenges - The macroeconomic environment remains difficult, particularly in Europe and China, affecting demand and pricing across Dow's segments [8] - Unplanned operational disruptions, such as the Texas cracker outage, have necessitated adjustments to maintain supply chain efficiency [8] Future Outlook - Dow's management did not provide specific guidance on revenue or earnings but emphasized strategic initiatives in high-growth markets like electronics and packaging [9] - The company plans to reduce capital expenditure for 2025 by $300 million to $500 million and aims to cut annual costs by $1 billion through operational efficiency improvements [9]

Core Insights - Dow Inc. reported $10.41 billion in revenue for Q4 2024, a 2% decline year-over-year, with an EPS of $0.00 compared to $0.43 a year ago, indicating a significant drop in profitability [1] - The revenue fell short of the Zacks Consensus Estimate of $10.43 billion by 0.22%, and the EPS was 100% below the consensus estimate of $0.23 [1] Revenue Performance by Segment - Performance Materials & Coatings generated $1.97 billion, exceeding the average estimate of $1.94 billion, reflecting a year-over-year increase of 3.8% [4] - Corporate revenues reached $177 million, surpassing the average estimate of $135.01 million, marking a year-over-year growth of 28.3% [4] - Packaging & Specialty Plastics reported $5.32 billion, below the average estimate of $5.55 billion, showing a year-over-year decline of 5.8% [4] - Industrial Intermediates & Infrastructure achieved $2.95 billion, slightly above the average estimate of $2.90 billion, with no change year-over-year [4] Operating EBITDA Performance - Operating EBITDA for Packaging & Specialty Plastics was $832 million, lower than the average estimate of $927.98 million [4] - Corporate operating EBITDA was -$56 million, better than the average estimate of -$66.88 million [4] - Performance Materials & Coatings had an operating EBITDA of $189 million, below the average estimate of $224.78 million [4] - Industrial Intermediates & Infrastructure reported an operating EBITDA of $240 million, significantly above the average estimate of $136.21 million [4] Stock Performance - Dow Inc. shares have returned +2.3% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - The content emphasizes the importance of conducting personal due diligence and consulting competent advisors before making any financial decisions, particularly in relation to investments and financial instruments [1]. Group 1 - The website provides general news, personal analysis, and third-party content intended for educational and research purposes [1]. - It explicitly states that the information should not be interpreted as recommendations or advice for any financial actions [1]. - The content is not tailored to individual financial situations or needs, highlighting the necessity for users to assess their own circumstances [1]. Group 2 - The website includes information on complex financial instruments such as cryptocurrencies and contracts for difference (CFDs), which carry a high risk of losing money [1]. - Users are encouraged to perform their own research and understand the risks involved before investing in any financial instruments [1].

Financial Performance - Dow Inc. reported break-even quarterly earnings per share, missing the Zacks Consensus Estimate of $0.23, and down from $0.43 per share a year ago, representing an earnings surprise of -100% [1] - The company posted revenues of $10.41 billion for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.22%, and down from $10.62 billion year-over-year [2] - Over the last four quarters, Dow Inc. has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Market Performance - Dow Inc. shares have added about 2.3% since the beginning of the year, compared to the S&P 500's gain of 2.7% [3] - The current consensus EPS estimate for the coming quarter is $0.53 on revenues of $10.89 billion, and for the current fiscal year, it is $2.66 on revenues of $44.34 billion [7] Industry Outlook - The Zacks Chemical - Diversified industry, to which Dow Inc. belongs, is currently in the bottom 8% of over 250 Zacks industries, indicating a challenging environment [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Dow Inc.'s stock performance [5][6]

Financial Performance - Net sales for Q4 2024 were $10.4 billion, down 2% year-over-year and down 4% sequentially[3] - GAAP net loss was $35 million, or $0.08 per share, with operating earnings per share at $0.00[3] - Operating EBIT was $454 million, a decrease of $105 million year-over-year and down $187 million sequentially[3] - Full year 2024 net sales totaled $43.0 billion, compared to $44.6 billion in 2023, with GAAP net income increasing to $1.2 billion from $660 million[3] - Net income available for Dow Inc. common stockholders was a loss of $53 million in Q4 2024, compared to a loss of $105 million in Q4 2023[34] - Net income for 2024 was $1,201 million, a significant increase from $660 million in 2023, representing an 82% growth[39] - Total net sales for 2024 were $42,964 million, down 4% from $44,622 million in 2023[41] - For the three months ended Dec 31, 2024, reported net income was $(53) million, with an EPS of $(0.08) after significant items totaling $(76) million[45] - For the twelve months ended Dec 31, 2024, reported net income was $1,116 million, with an EPS of $1.57, while operating results (non-GAAP) showed net income of $1,212 million and an EPS of $1.71[51] Cash Flow and Operating Activities - Cash provided by operating activities was $811 million, down $817 million year-over-year but up $11 million sequentially[3] - Cash provided by operating activities for continuing operations was $2,903 million in 2024, down from $5,164 million in 2023, a decrease of 43.7%[39] - Free Cash Flow for the year ended December 31, 2024, was not explicitly stated but is a key financial measure for funding obligations and returns to shareholders[31] - Free cash flow for the three months ended Dec 31, 2024, was $44 million, a significant decrease from $870 million in the same period of 2023[60] - Total cash used for financing activities decreased to $1,168 million in 2024 from $3,115 million in 2023, a reduction of 62.5%[39] - The company reported a cash flow conversion rate of 67.3% for the three months ended Dec 31, 2024[60] Segment Performance - The Packaging & Specialty Plastics segment reported net sales of $5.3 billion, down 6% year-over-year[6] - The Industrial Intermediates & Infrastructure segment had flat net sales of $2.9 billion year-over-year, with operating EBIT increasing by $69 million[11] - Performance Materials & Coatings segment net sales increased by 4% year-over-year to $2 billion, with operating EBIT improving by $52 million[16] - Operating EBIT for the Packaging & Specialty Plastics segment decreased to $447 million in Q4 2024 from $664 million in Q4 2023, a decline of 32.7%[43] - The Performance Materials & Coatings segment reported an operating EBIT of $(9) million in Q4 2024, compared to $(61) million in Q4 2023, showing improvement[43] - The corporate segment's operating EBIT improved to $(68) million in Q4 2024 from $(59) million in Q4 2023, indicating a positive trend[43] Assets and Liabilities - Total assets decreased to $57,312 million as of December 31, 2024, from $57,967 million as of December 31, 2023, indicating a decline of approximately 1.1%[36] - Long-term debt increased to $15,711 million in 2024 from $14,907 million in 2023, representing an increase of about 5.4%[36] - Cash and cash equivalents decreased to $2,189 million in 2024 from $2,987 million in 2023, a decline of approximately 26.7%[36] - The company reported a decrease in cash and cash equivalents at the end of the year to $2,189 million from $2,987 million in 2023, a decline of 26.7%[39] Cost Management and Restructuring - The company plans to implement $1 billion in targeted cost reductions and reduce 2025 CapEx plans by $300 - 500 million[20] - The company reported a significant restructuring charge of $34 million in Q4 2024, compared to a credit of $21 million in Q4 2023[34] - The company incurred restructuring and efficiency costs of $(315) million for the twelve months ended Dec 31, 2024, impacting net income by $(245) million[51] - Restructuring charges for the three months ended Sep 30, 2024, amounted to $(79) million, affecting net income by $(62) million[58] External Factors and Challenges - The company anticipates ongoing challenges due to geopolitical factors, including the conflicts in Russia and Ukraine, which may impact future performance[25] - The Argentine peso devaluation resulted in a loss of $(177) million for the twelve months ended Dec 31, 2023, impacting overall financial results[51] - The company faced significant litigation-related charges of $(71) million for the twelve months ended Dec 31, 2023[51] Research and Development - Research and development expenses decreased to $202 million in Q4 2024 from $213 million in Q4 2023, reflecting a reduction of approximately 5.2%[34]

Core Viewpoint - Dow Inc. has announced targeted actions to achieve $1 billion in cost savings in response to ongoing macroeconomic uncertainty, aiming to enhance long-term competitiveness [1][5]. Cost Savings Strategy - The majority of the $1 billion in cost savings is expected to come from a reduction in direct costs, primarily focusing on purchased services and third-party contract labor, with a projected reduction of $500 million to $700 million [6]. - The company plans to reduce labor costs, including a workforce reduction of approximately 1,500 roles globally [6]. Financial Impact - Dow will incur a charge of $250 million to $325 million in the first quarter of 2025 for costs associated with these actions, which include severance and related benefits [1]. - The costs to implement these actions will be expensed as incurred, estimated to range from $20 million to $30 million [1]. Company Overview - Dow is a leading materials science company with a focus on high-growth markets such as packaging, infrastructure, mobility, and consumer applications, delivering sales of approximately $43 billion in 2024 [3]. - The company operates manufacturing sites in 30 countries and employs around 36,000 people [3].