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Researched by Industrial Info Resources (Sugar Land, Texas)--While Chemical Processing company Dow Incorporated (NYSE:DOW) (Midland, Michigan) experienced outages from Winter Storm Uri, which hit Texas in February, causing widespread power outages and unplanned shutdowns, lower inventories after the storm, coupled with high demand, brought higher-than-expected profits to the company in the first quarter.
In the company's recent first-quarter 2021 earnings results conference call, Chief Executive Officer Jim Fitterling said about the storm, "This event had a far-reaching impact across our industry and broader market. Our colleagues quickly and safely got our units back online... All impacted units are back online, and we reached pre-storm operating rates by the end of March, ahead of plan." Despite a $400 million impact from Winter Storm Uri, Dow delivered about $750 million cash from operations.
Fitterling said the tight supplies caused by the outages along the Gulf Coast drove Dow's prices, and earning results, higher than previously forecasted guidance. "Sales were up 22% year over year, with gains in all operating segments and every region. We continued to benefit from strong price momentum, with improvements in all segments, businesses and regions." Dow reported first-quarter 2021 net income of $991 million, compared with $239 million in the prior-year quarter.
And these financial good times may not be over. Dow's president and chief financial officer, Howard Ungerleider, said that robust demand, tight supply and low inventories continue to support prices across many of Dow's value chains. Ungerleider said, "We expect the constrained industry inventory levels to continue in the second quarter, preventing inventory builds until later this year, as we focus on clearing the growing backlog of customer orders." Dow expects the current second quarter to be the best quarter of the year, anticipating $750 million to $800 million in higher earnings than the first quarter, although this will be offset by around $200 million to $250 million in turnarounds. Second-quarter turnarounds include that of the company's light hydrocarbons unit on the Gulf Coast. The turnaround starts this month and is anticipated to last into June. If you subscribe to Industrial Info's Chemical Processing database, click here to see project report.
Fitterling said that there had been particularly robust demand for consumer electronics and mobility applications, and Ungerleider noted that electric vehicles, a quickly growing market, use three to four times more silicone products than traditional vehicles--good news for Dow.
In the quarter, Dow stepped up its anticipated growth capital expenditures to a little more than $1.6 billion for the year. Fitterling said this would primarily go toward "faster payback types of projects" with high return on investment. This after reducing workforce by 6% and a reduction of capital expenditures by 30% in 2020 due to pandemic-related market issues. Dow reportedly spent $1.25 billion on capital expenditures in 2020.
Dow also is spending quite a bit on environmental upgrades to reduce emissions at two Texas plants. To comply with a mandate from the U.S. Environmental Protection, Dow is installing flare gas recovery systems along with flare monitoring and control equipment to assure high combustion efficiency. If you subscribe to Industrial Info's Chemical Processing database, click here to see the environmental upgrade projects.
Major Dow projects currently in review and awaiting a financial investment decision later this year include a possible 600,000-ton-per-year polyethylene unit along the Gulf Coast. If you subscribe to Industrial Info's Chemical Processing database, click here for project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
In the company's recent first-quarter 2021 earnings results conference call, Chief Executive Officer Jim Fitterling said about the storm, "This event had a far-reaching impact across our industry and broader market. Our colleagues quickly and safely got our units back online... All impacted units are back online, and we reached pre-storm operating rates by the end of March, ahead of plan." Despite a $400 million impact from Winter Storm Uri, Dow delivered about $750 million cash from operations.
Fitterling said the tight supplies caused by the outages along the Gulf Coast drove Dow's prices, and earning results, higher than previously forecasted guidance. "Sales were up 22% year over year, with gains in all operating segments and every region. We continued to benefit from strong price momentum, with improvements in all segments, businesses and regions." Dow reported first-quarter 2021 net income of $991 million, compared with $239 million in the prior-year quarter.
And these financial good times may not be over. Dow's president and chief financial officer, Howard Ungerleider, said that robust demand, tight supply and low inventories continue to support prices across many of Dow's value chains. Ungerleider said, "We expect the constrained industry inventory levels to continue in the second quarter, preventing inventory builds until later this year, as we focus on clearing the growing backlog of customer orders." Dow expects the current second quarter to be the best quarter of the year, anticipating $750 million to $800 million in higher earnings than the first quarter, although this will be offset by around $200 million to $250 million in turnarounds. Second-quarter turnarounds include that of the company's light hydrocarbons unit on the Gulf Coast. The turnaround starts this month and is anticipated to last into June. If you subscribe to Industrial Info's Chemical Processing database, click here to see project report.
Fitterling said that there had been particularly robust demand for consumer electronics and mobility applications, and Ungerleider noted that electric vehicles, a quickly growing market, use three to four times more silicone products than traditional vehicles--good news for Dow.
In the quarter, Dow stepped up its anticipated growth capital expenditures to a little more than $1.6 billion for the year. Fitterling said this would primarily go toward "faster payback types of projects" with high return on investment. This after reducing workforce by 6% and a reduction of capital expenditures by 30% in 2020 due to pandemic-related market issues. Dow reportedly spent $1.25 billion on capital expenditures in 2020.
Dow also is spending quite a bit on environmental upgrades to reduce emissions at two Texas plants. To comply with a mandate from the U.S. Environmental Protection, Dow is installing flare gas recovery systems along with flare monitoring and control equipment to assure high combustion efficiency. If you subscribe to Industrial Info's Chemical Processing database, click here to see the environmental upgrade projects.
Major Dow projects currently in review and awaiting a financial investment decision later this year include a possible 600,000-ton-per-year polyethylene unit along the Gulf Coast. If you subscribe to Industrial Info's Chemical Processing database, click here for project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
