Thursday, April 26, 2007

Dow Chemical 10am Earnings Call Highlights

  • Repurchased 9.3 million shares at a cost of over $400 million to complete 2005 program
  • 2006 share repurchase program triggered ($2 billion program)
  • Outstanding shares are being reduced and the new $2 billion program should be completed by middle of next year (approx. 45 million shares)
  • The "death of polyethylene" has been greatly exaggerated with demand only slowing in N. America
  • Liveris "2007 will change the earnings profile of the company from a commodity company"
  • Liveris "A big bang deal is not necessary to achieve this"
  • Debt is not being used for "assets light" expansion
  • High feedstock cost assets in N. America that were initially built to export, are being shut and moved to oversees to inexpensive feedstock geographic areas (Libya, Saudi Arabia, India, Russia, Asia) reducing costs.
  • Liveris on acquisitions when asked about GE Global "Nothing is off the table as long as it provides the correct integration" and "they are possible"
  • Increasing dividends vs increasing buyback: Desire to keep yield above 3.5% and add consistency to shareholder renumeration
  • Industry consolidation will continue

PDF. of presentation:

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