Dow Chemicals Q2 net sales down 31%

Dow reported sales of $11.3 billion for the second quarter of 2009, down 31 percent from reported sales in the same period last year. On a pro forma basis, sales for the second quarter were 40 percent lower than the same period last year, but 5 percent higher than the prior quarter.

Net income (loss) from continuing operations for the quarter was a loss of $435 million. This compares with net income of $776 million in the second quarter of 2008.

Dow reported a loss for the current quarter of $0.47 per share versus earnings of $0.81 per share in the second quarter of 2008 and earnings of $0.03 per share in the first quarter of 2009.

Health and Agricultural Sciences sales were $1.2 billion in the second quarter of 2009, down 12 percent from $1.4 billion in the year-ago period. Volume decreased 7 percent while price was down 5 percent due to currency.

Agricultural Chemicals was negatively impacted by unfavorable weather patterns across North America and Europe (unusually wet) and in Argentina (extreme drought) which limited weed pressure. In addition, lower farm commodity prices drove farmers to reduce input costs, which significantly reduced demand.

Despite these unfavorable market conditions, new products such as cereal herbicide pyroxsulam and rice herbicide penoxsulam continued to ramp up successfully.

Seeds, Traits and Oils continued to post record sales growth, with volume gains of nearly 60 percent compared with the same period last year, due to organic growth and growth from recent seed acquisitions. Cotton seed sales doubled from the same period last year, and hybrid alfalfa - a seed product exclusive to Dow AgroSciences - is quickly gaining acceptance in the marketplace.

EBITDA for Health and Agricultural Sciences was $140 million, primarily reflecting the negative impact of higher costs associated with the valuation of inventory based on reduced raw material prices, currency impacts and volume declines, as well as increased investments in R&D.

This compares with EBITDA of $356 million in the second quarter of 2008.