Dow Chemical posts significant fourth-quarter loss

The Dow Chemical Co., Midland, Mich., the largest U.S. chemical maker, posted a fourth-quarter net loss of $1.55 billion, according to The New York Times. A year earlier, the company posted a $472 million profit.

Excluding items, Dow Chemical posted a loss of 62 cents per share compared with a profit of 84 cents per share one year ago. The loss demonstrates how the chemical sector has been significantly affected by the global recession. In addition, the performance plastics segment, which includes Dow Automotive and Dow Building Solutions, posted a fourth-quarter loss of $479 million.

During the past two years, Dow Chemical has implemented a strategy to overhaul its earnings profile. It started by announcing plans to sell a 50 percent stake in its basic plastics business to Kuwaiti investors for more than $9 billion; however, that deal fell through when Kuwait backed out.

The failure of that joint venture affected Dow Chemical’s plans to acquire specialty chemical maker Rohm & Haas, Philadelphia, for more than $15 billion, which would have been paid for in part with proceeds from the Kuwait deal. In January, Dow Chemical announced it would not complete the acquisition on schedule because of the economic downturn. Rohm & Haas has sued Dow Chemical, believing the company should honor the merger agreement.

Dow Chemical shares have fallen almost 70 percent during the past six months.

Date : 2/3/2009