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Dow Chemical warns
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February 14, 2001: 5:24 p.m. ET
Says merger with Union Carbide will hit results by undetermined amount
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NEW YORK (CNNfn) - Dow Chemical Co. said the completion of its long-delayed merger with Union Carbide Corp. will hurt first-quarter earnings per share, but it did not give a new earnings range.
Dow had issued an earnings warning for the current period when it reported first-quarter results last month, before the closing of the deal. That guidance put earnings per share in the range of 25-to-40 cents in the first quarter, which fell short of EPS forecasts at that time of 47 cents. Analysts surveyed by earnings tracker First Call dropped first quarter EPS estimates to 26 cents after the warning.
 The merger, first announced Aug. 4, 1999, finally closed Feb. 6, 2001, months after originally planned. It created the world's second-largest chemical company behind Du Pont & Co.(DD: Research, Estimates). It was valued at $11.6 billion in stock and debt at the time it was announced and $7.3 billion when it closed.
Dow Chemical said Wednesday that guidance was based on expectations for the businesses that were part of Dow prior to the merger, as well as the 683 million shares outstanding at that time.
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There are now close to 900 million shares outstanding. The company said its EPS is also being hit by higher U.S. natural gas costs in the first quarter compared with the fourth quarter of 2000.
Union Carbide had also warned on results for the third and fourth quarters before the closing of the deal.
Shares of Dow (DOW: Research, Estimates) lost 50 cents in after-hours trading immediately following the warning, after slipping 4 cents to close at $31.40 in regular-hours activity Wednesday ahead of the statement. 
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