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Dow Chemical profit falls
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April 26, 2001: 9:11 a.m. ET
First quarterly results after Union Carbide merger hurt by oil, gas prices
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NEW YORK (CNNfn) - Dow Chemical Co. reported lower first-quarter profit Thursday, coming up short of Wall Street forecasts in its first report since its merger with Union Carbide Co.
Dow said it earned 26 cents a share in the period, excluding special items. But that includes an 18 cents a share gain from sale of stock in oil field services company Schlumberger Ltd. (SLB: Research, Estimates). The company also said it had a 4 cents a share gain from an accounting change related to derivative instruments and hedging activities.
An official with earnings tracker First Call said the 18 cents gain from Schlumberger definitely should be excluded for purposes of comparisons to forecasts, but said the service would wait to hear from analysts as to how they consider the other 4 cent gain. That still leaves the company either 1 cent or 5 cents a share short of the consensus forecast of 9 cents a share for the period.
Dow Chemical took a $1.02 a share charge for merger-related activities, which caused it to post a net loss of $685 million, or 76 cents a share, in the period. That compares with net income of $512 million, or 57 cents a share, in the year-earlier period.
The company, the world's second-largest chemical company after DuPont Co. (DD: Research, Estimates), said higher energy and raw material prices raised costs $600 million in the period.
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Net sales edged up to $7.4 billion from $7.3 billion a year earlier.
The company's statements include results from Union Carbide for both the entire first quarter and for the year-earlier quarter, even though the deal did not close until Feb. 6 this year. The deal initially was agreed to in August 1999.
Shares of Dow (DOW: Research, Estimates) closed down 72 cents at $33.07 Wednesday. 
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