Dow Inc delivered a solid top-line performance for Q4 2024 with revenue of $10.405 billion and an EBITDA bridge of $1.186 billion, translating to an EBITDA margin of about 11.4%. The quarter shows a relatively resilient operating cash flow, with $814 million generated from operations and a free cash flow of $43 million. However, profitability was constrained by a modest gross margin of 8.99% and a net loss of $53 million, resulting in a negative net margin of -0.51%. On a per-share basis, diluted EPS rose to $0.50-$0.60 range versus prior periods, aided by a favorable share count dynamic, but the reported net income remains negative for the quarter. QoQ metrics deteriorated modestly versus Q3 2024 on revenue, gross profit, and operating income, while YoY comparisons reflect a softer revenue base but an improved year-over-year net income trajectory driven by mix and one-time/structural effects.
From a balance sheet and cash-flow lens, Dow remains cash-generative at the operating level despite a high leverage profile. Total debt stands at roughly $17.65 billion with net debt around $15.46 billion. Cash and short-term investments total approximately $2.19 billion, and cash on hand at period-end sits near $2.26 billion. The company reported current and quick ratios of about 1.61x and 0.98x, respectively, underscoring reasonable liquidity but a balance-sheet risk given significant leverage (total debt to capitalization approx. 50%). Management commentary (where available) emphasized ongoing focus on product mix, cost discipline, and capital allocation, though explicit forward guidance was not disclosed in the provided materials.
The outlook remains tethered to macro volatility in energy and raw-material costs, as well as end-market demand in packaging, coatings, and infrastructure. Investors should monitor: (1) raw-material and energy price pass-through and input cost inflation, (2) capacity utilization and demand in key Dow segments, (3) progress on deleveraging and any capital allocation plans, and (4) currency dynamics given the global footprint. Overall, the stock carries a cautious near-term risk-reward profile given the leverage and net-loss print, but the cash-generation ability and segment diversification offer potential for improvement should operating conditions stabilize and cost programs take hold.
Net Income: -$0.053B YoY +49.52%; QoQ -124.77% (net income remained negative)
Financial Highlights
Overview:
- Revenue: $10.405B YoY -2.03%; QoQ -4.36%
- Gross Profit: $0.935B YoY -4.10%; QoQ -12.62%; Gross Margin ~8.99%
- EBITDA: $1.186B (EBITDAR ~11.40% of revenue)
- Operating Income: $0.304B YoY -64.86%; QoQ -22.05%
- Net Income: -$0.053B YoY +49.52%; QoQ -124.77% (net income remained negative)
- EPS: $0.60 (diluted $0.50); YoY +140%; QoQ -80%
Profitability and Margin Trends:
- Net Margin: -0.51%; Operating Margin: ~2.92%
- Free Cash Flow: $0.043B; FCF Margin ~0.4%
Liquidity and Balance Sheet:
- Cash and equivalents: ~$2.19B; Total cash at end: ~$2.263B
- Total debt: ~$17.645B; Net debt: ~$15.456B
- Total assets: ~$57.312B; Total equity: ~$17.355B
- Current ratio: ~1.61x; Quick ratio: ~0.98x; Cash ratio: ~0.213x
- Debt-to-capitalization: ~0.504; Debt-to-equity: ~1.02
Operational Leverage and Cash Flow:
- Operating cash flow: $0.814B; Capex: $0.771B; Free cash flow: $0.043B
- Working capital dynamics: DSO ~59.4 days, DIO ~62.2 days, DPO ~46.1 days; CCC ~121.6 days
Industry Positioning and Valuation Context:
- Dow’s EBITDA margin (~11.4%) sits in the mid-band for diversified chemicals, but net profitability is hampered by leverage and tax/one-off factors in the period. Relative to broader chemical peers, Dow exhibits meaningful leverage and a thin net margin despite a durable operating cash flow, suggesting near-term upside hinges on cost optimization and deleveraging.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
10.41B
-2.03%
-4.36%
Gross Profit
935.00M
-4.10%
-12.62%
Operating Income
304.00M
-64.86%
-22.05%
Net Income
-53.00M
49.52%
-124.77%
EPS
0.06
140.00%
-80.00%
Key Financial Ratios
currentRatio
1.61
grossProfitMargin
8.99%
netProfitMargin
-0.51%
returnOnAssets
-0.09%
returnOnEquity
-0.31%
debtEquityRatio
1.02
operatingCashFlowPerShare
$1.16
freeCashFlowPerShare
$0.06
dividendPayoutRatio
-928%
priceToBookRatio
1.6
priceEarningsRatio
-131.18
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Notes from the earnings materials indicate a focus on portfolio optimization and cost discipline, but no transcript was provided in the data set to extract verbatim management quotes. As a result, thematic insights are drawn from the quarterly results rather than direct call commentary. Anticipated themes for future discussions include: (1) price realization and customer mix effects on margins, (2) progress on cost-reduction initiatives and supply-chain efficiencies, (3) capital allocation strategy including deleveraging plans and potential returns to shareholders, and (4) sensitivity to feedstock and energy costs given macro volatility.
N/A
— N/A
N/A
— N/A
Forward Guidance
There is no explicit forward guidance in the supplied materials. In the context of Dow’s Q4 2024 results, investors should monitor: (a) the trajectory of input costs (feedstocks, energy) and pass-through capabilities in the product mix, (b) demand signals from key end-markets like packaging, coatings, and infrastructure spending, (c) potential deleveraging actions and any changes to the capital allocation framework, (d) currency movements given a global footprint. Based on current results, the forward view hinges on improving margin discipline alongside continued operating cash flow generation to reduce net leverage.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
2OY.DE Focus
8.99%
0.00%
-0.31%
-131.18%
DOW
8.99%
2.92%
-0.30%
-133.22%
RIO1.DE
0.00%
0.00%
0.00%
0.00%
ASME.DE
51.70%
36.20%
14.60%
24.72%
BSP.DE
0.00%
0.00%
0.00%
0.00%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Dow’s Q4 2024 results show a durable operating cash flow foundation and a meaningful EBITDA contribution, but profitability remains pressured by net losses and a sizable debt burden. The near-term investment thesis hinges on deleveraging progress, margin expansion through cost discipline, and favorable end-market dynamics in packaging and coatings. If Dow can convert its robust operating cash flow into meaningful debt reduction and improved net margins, the stock could re-rate; otherwise, leverage and cyclicality pose meaningful downside risk. In the near term, investors should monitor input-cost trends, pricing actions, capital-allocation decisions, and any explicit guidance on deleveraging timelines. The company’s current position supports a cautious but constructive view contingent on balance-sheet optimization and sustained cash generation.
Key Investment Factors
Growth Potential
Growth potential exists in packaging, coatings, and industrial intermediates where Dow benefits from a diversified portfolio and global footprint. Incremental EBITDA could be realized through price realization in inflationary environments, higher-value product mixes, and cost-structure optimization across its operating segments.
Profitability Risk
Key risks include cyclicality in end-markets, volatility in feedstock and energy costs, competitive pressure, and a high debt load that constrains financial flexibility. The negative net income print and modest free cash flow underline profitability and leverage risks that could escalate in a downturn.
Financial Position
Dow shows robust operating cash flow and a solid liquidity base, but elevated net debt (~$15.46B) and a high debt-to-capitalization (~0.504) raise leverage concerns. The balance sheet supports debt servicing in the near term, yet deleveraging and capital allocation will be critical to sustain credit quality and investor confidence.
SWOT Analysis
Strengths
Diversified product portfolio across Performance Materials, Coatings, Industrial Intermediates, Infrastructure and Packaging, and Specialty Plastics.
Global manufacturing and R&D network supporting scale and innovation.
Positive operating cash flow generation and a material EBITDA level (~$1.19B) in Q4 2024.
Weaknesses
Negative net income in Q4 2024 and thin net margins (-0.51%).
High total debt and moderate interest coverage; leverage remains a strategic risk.
Relatively long working-capital cycles (CCC ~122 days) and inventory intensity.
Opportunities
Growth in packaging and coatings end-markets with potential price realization to improve margins.
Cost-reduction and productivity improvement programs could lift EBITDA margins.
Strategic portfolio optimization and potential deleveraging improving balance-sheet resiliency.
Threats
Macro volatility in energy and commodity prices impacting input costs.
Cyclicality of the basic materials space; demand sensitivity in key end-markets.
Regulatory and environmental considerations influencing capital allocation and capex decisions.