Dow Chemical headquarters in Midland, Mich.Bill Pugliano
Dow Chemical Co. posted a higher-than-expected quarterly profit, helped largely by sales of plastics, pesticides and electronic parts.
The largest U.S. chemical maker said volume at only two of its business units had hit pre-recession levels, hinting that it has room for continued growth beyond Wall Street's expectations.
Shares of Dow were up nearly 2 per cent in pre-market trading.
While specialty chemical sales jumped during the quarter, the company's plastics unit continued to be the breadwinner, bringing in the largest share of revenue at $3-billion (U.S.).
For the first quarter, Dow posted net income of $625-million, or 54 cents per share, compared with $466-million, or 41 cents per share, a year earlier.
Excluding charges to cull debt and finish integrating assets from its two-year-old purchase of Rohm & Haas, Dow earned 82 cents per share. By that measure, analysts expected 67 cents, according to Thomson Reuters I/B/E/S.
Revenue rose 10 per cent to $14.73-billion. Analysts expected $14.03-billion.
Farmers gobbled up Dow's pesticides and genetically modified seeds, sending agricultural sales up 17 per cent.
Electronic parts sales rose 14 per cent to $1.3-billion on high demand for products such as televisions and Apple Inc's iPad.
Dow, like other chemical makers, has benefited from the confluence of cheap North American shale natural gas and rising consumer demand.
The company bought specialty chemical maker Rohm & Haas nearly two years ago in a heavily scrutinized deal worth more than $15-billion.
The acquisition was intended to wean Dow off ethylene and other commodity chemicals, which are used in basic plastics and made in large batches, but have razor-thin margins.
The appeal of Rohm's technology is that it would let Dow expand into high-margin specialty chemicals, including materials for solar panels and televisions.
Yet the specialty chemicals part of Dow's portfolio has yet to outshine the commodity business. Last week Dow admitted as much when it said it would restart an idled ethylene plant in Louisiana and build an entirely new plant to be on line by 2017.
Exxon Mobil is the second-largest United States-based chemical maker.
Dow shares were up 1.7 per cent at $40.60 in trading before the market opened.