EPS of $0.30 decreased by 30.2% from previous year
Gross margin of 9.8%
Net income of 214.00M
"N/A" - N/A
Dow Inc (2OY.DE) QQ3 2024 Results Analysis: Modest Revenue Uptick Amid Margin Pressures in a Cyclical Basic Materials Landscape
Executive Summary
Dow Inc reported Q3 2024 revenue of $10.879 billion, up 1.39% year over year but down 0.33% quarter over quarter. The company posted a gross profit of $1.07 billion and a net income of $214 million, translating to a net margin of approximately 1.97% and an EPS of $0.30. Profitability declined meaningfully versus the prior year, as gross margin (about 9.84%) and operating margins (3.58%) remained under pressure despite a high single-digit EBITDA of $1.264 billion. Free cash flow was negative at about $(57) million for the quarter, with operating cash flow of $800 million and capex of $857 million, signaling ongoing capital intensity and working-capital dynamics that influenced liquidity generation.
From a balance sheet perspective, Dow held cash and cash equivalents of roughly $2.88 billion and total assets near $59.39 billion. Total debt stood at about $17.91 billion, with net debt around $15.03 billion, and leverage metrics showing a debt-to-equity ratio of 0.98 and a debt ratio of 0.30. Liquidity and coverage ratios suggest a solid liquidity position but a constrained free-cash-flow profile in this quarter, highlighting the cyclical nature of Dow’s end-markets and the need for continued efficiency and productivity gains. Management commentary on ongoing price recovery, cost discipline, and supply-demand dynamics was not captured in the provided transcript data, limiting visibility into qualitative upside signals for the near term.
Overall, the QQ3 2024 results present a cautious tone: revenue momentum is modest, profitability is challenged by input and overhead costs, and cash generation remains constrained by capital expenditure and working-capital needs. Investors should monitor commodity pricing, energy costs, productivity initiatives, and any shifts in demand for Dow’s coatings, packaging, and specialty plastics end-markets as catalysts or headwinds for the next quarters.
Key Performance Indicators
Revenue
10.88B
QoQ: -0.33% | YoY:1.39%
Gross Profit
1.07B
9.84% margin
QoQ: -19.18% | YoY:-5.98%
Operating Income
390.00M
QoQ: -41.00% | YoY:-61.04%
Net Income
214.00M
QoQ: -51.25% | YoY:-29.14%
EPS
0.30
QoQ: -51.61% | YoY:-30.23%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $10.879 billion in Q3 2024, YoY +1.39%, QoQ -0.33%
Net Income: $0.214 billion; net margin 1.97%; YoY -29.14%, QoQ -51.25%
Financial Highlights
- Revenue: $10.879 billion in Q3 2024, YoY +1.39%, QoQ -0.33%
- Gross Profit: $1.07 billion; gross margin 9.84%; YoY margin decline (-5.98%) and QoQ decline (-19.18%)
- EBITDA: $1.264 billion; EBITDA margin 11.62%
- Operating Income: $0.39 billion; operating margin 3.58% (YoY -61.04%, QoQ -41.00%)
- Net Income: $0.214 billion; net margin 1.97%; YoY -29.14%, QoQ -51.25%
- EPS (diluted): $0.30; YoY -30.23%, QoQ -51.61%
- Cash Flow: Operating cash flow $0.80 billion; capex $0.857 billion; free cash flow negative $(57) million
- Balance Sheet: total assets $59.39B; total debt $17.91B; net debt $15.03B; cash $2.88B; current ratio 1.66; quick ratio 1.04; days sales outstanding 60.5; days inventory 61.9; days payables 46.7; CCC ~75.6 days
- Leverage and liquidity: Debt-to-equity 0.98; interest coverage ~1.96x; cash ratio 0.266; cash flow to debt ~0.045x
- Valuation context (as of data): P/E ~44.4x; P/B ~2.07x; P/S ~3.49x; dividend yield ~1.29%
- Note: Earnings transcript data not provided in the dataset; no management quotes available for QQ3 2024.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
10.88B
1.39%
-0.33%
Gross Profit
1.07B
-5.98%
-19.18%
Operating Income
390.00M
-61.04%
-41.00%
Net Income
214.00M
-29.14%
-51.25%
EPS
0.30
-30.23%
-51.61%
Key Financial Ratios
currentRatio
1.66
grossProfitMargin
9.84%
operatingProfitMargin
3.58%
netProfitMargin
1.97%
returnOnAssets
0.36%
returnOnEquity
1.17%
debtEquityRatio
0.98
operatingCashFlowPerShare
$1.14
freeCashFlowPerShare
$-0.08
dividendPayoutRatio
229%
priceToBookRatio
2.07
priceEarningsRatio
44.38
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Transcript highlights unavailable due to absence of earnings call transcript in the provided data. No management quotes or thematic color (strategy, operations, market conditions) could be extracted or corroborated from the QQ3 2024 materials included in this analysis.
N/A
— N/A
N/A
— N/A
Forward Guidance
No explicit forward guidance is present in the supplied data for Dow Inc QQ3 2024. Given the macro cycle in basic materials and Dow’s capital-intensive model, investors should consider the following qualitative factors when modeling the next quarters: (i) potential stabilization or recovery in input costs and end-market demand (e.g., coatings, packaging, industrial intermediates) that could lift gross margins; (ii) ongoing productivity and cost-reduction initiatives to offset inflationary pressure and sustain EBITDA; (iii) cash flow resilience through working capital management and capex discipline; (iv) sensitivity to energy and feedstock costs and their impact on margin recovery; (v) balance-sheet leverage and capacity to fund capital allocation (dividends vs. buybacks vs. deleveraging). An achievable near-term target would likely hinge on stabilization of input costs and a modest rebound in end-market demand, with a focus on converting operating earnings into stronger free cash flow over the next several quarters.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
2OY.DE Focus
9.84%
3.58%
1.17%
44.38%
DOW
9.84%
3.58%
1.17%
44.82%
ASME.DE
50.80%
32.70%
12.90%
35.36%
MMM.DE
42.10%
20.90%
29.60%
13.74%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Neutral-to-cautious with a tilt toward cyclical recovery if end-market demand stabilizes and Dow can improve gross and operating margins through pricing, productivity, and disciplined capital allocation. The stock trades at a relatively high earnings multiple (P/E ~44x) with modest free cash flow generation in QQ3 2024, underscoring the need for visible margin expansion or stronger top-line growth to justify valuation. Investors should monitor: 1) trajectory of input costs and Dow’s cost-savings initiatives, 2) demand trends in coatings, infrastructure, packaging, and specialty plastics, and 3) leverage management strategies that could unlock cash flow or de-lever the balance sheet over the coming quarters.
Key Investment Factors
Growth Potential
Moderate near-term growth potential driven by selective high-margin coatings, packaging, and specialty plastics segments; potential margin expansion if cost-savings and price realizations offset input cost volatility.
Profitability Risk
Cyclicality of industrial materials markets; commodity price and energy cost volatility; exposure to global demand fluctuations; supply chain disruptions; high leverage relative to peers; potential dilution if equity raises occur.
Financial Position
Strong liquidity cushion with $2.88B cash; modest free cash flow generation in QQ3 2024; still levering with net debt ~$15.03B; robust asset base supporting operations and capital investments.
SWOT Analysis
Strengths
Diverse portfolio across Performance Materials, Coatings, Industrial Intermediates, Infrastructure, and Packaging, enabling cross-sector applications (coatings, home and personal care, durable goods, adhesives, and food packaging).
Scale and global footprint with a broad research and development network.
Strong asset base and manufacturing capabilities supporting product breadth and customization.
Weaknesses
Low margin profile in QQ3 2024 with gross margin ~9.84% and operating margin ~3.58%; margin sensitivity to raw materials and energy costs.
Significant leverage (net debt ~$15.03B) with interest coverage ~1.96x; cash flow generation subdued by capex intensity.
Cyclical exposure to global industrial activity impacting revenue and profitability.
Opportunities
Growth in resin/formulation-intensive end-markets (packaging, coatings, specialty plastics) in emerging markets and recovery scenarios.
Productivity initiatives and cost-reduction programs to improve margins and cash conversion.
Strategic pricing and portfolio optimization to maximize high-margin product lines.
Threats
Commodity price volatility and energy costs impacting input costs.
Weak macro demand or prolonged cyclicals in global industrials could suppress volumes.
Regulatory and environmental costs potentially affecting production and capex requirements.