Dow Inc.

What they do

Dow operates manufacturing sites in 29 countries with approximately 34,600 employees, running an integrated ethylene-to-polyethylene chain and other chemical production. It reports through Packaging & Specialty Plastics; Industrial Intermediates & Infrastructure; and Performance Materials & Coatings, plus Corporate. The company serves end markets including packaging, infrastructure, mobility and consumer applications, and its 2025 sales were approximately $40 billion.

Revenue drivers

• Packaging & Specialty Plastics — The largest segment, containing Hydrocarbons & Energy and Packaging and Specialty Plastics; second quarter 2026 net sales were $6.4 billion, up 27% year-over-year, driven by higher polyethylene prices and partly offset by planned maintenance.
• Industrial Intermediates & Infrastructure — Second quarter 2026 net sales rose 14% year-over-year, with local price up 15%, per the company's quarter summary by segment.
• Performance Materials & Coatings — Second quarter 2026 net sales rose 11% year-over-year, with local price up 4% and volume up 6%, per the company's quarter summary.
• Geographic mix — Second quarter 2026 net sales rose in every region, led by Latin America at 41% on higher local price and volume, while Asia Pacific grew 5%.

Recent performance

Second quarter 2026 net sales were $12.1 billion, up 20% from $10.1 billion a year earlier, with local price up 20% and volume down 1%. GAAP net income was $802 million, or $0.99 per diluted share, and operating EBIT was $1.6 billion versus a loss of $21 million in the prior-year quarter. Cash provided by operating activities from continuing operations was $1.3 billion, and the company paid $253 million of dividends in the quarter. Full-year 2025 results were much weaker: revenue of $39.97 billion, a net loss of $2.44 billion, and operating cash flow of $1.03 billion.

Strategy

Dow has launched cost and portfolio actions against a prolonged industry downturn, including $1 billion of structural cost reductions announced in the first quarter of 2025 that included roughly 1,500 role reductions. In January 2026 the company announced Transform to Outperform, targeting at least $2 billion of near-term Operating EBITDA improvement with one-time costs of $1.1 billion to $1.5 billion, including $600 million to $800 million of severance tied to about 4,500 roles. Announced asset shutdowns include an ethylene facility in Bohlen, Germany by the end of 2027, chlor-alkali and vinyl assets in Schkopau, Germany by the end of 2027, and a basics siloxanes plant in Barry, United Kingdom by mid-year 2026. The Path2Zero project in Fort Saskatchewan was delayed by two years, with phases expected to start up by the end of 2029 and 2030.

Risks

• Industry overcapacity and weak pricing — Dow states that industry overcapacity and newer entrants exporting at anti-competitive economics have hurt results and cash flows and are expected to continue.
• Middle East conflict and shipping disruption — Disruption related to the Strait of Hormuz and Middle East conflict has hit energy and feedstock prices, regional production and logistics, and directly impacted Dow's joint ventures located in the Middle East.
• Tariffs and trade policy uncertainty — Dow cites an uncertain geopolitical environment and trade policy volatility as increasing market volatility and negatively impacting results and cash flows.
• Execution of restructuring and cost programs — The announced shutdowns and Transform to Outperform carry one-time costs of $1.1 billion to $1.5 billion and severance of $600 million to $800 million, with asset closures and decommissioning running primarily over four years.

Outlook

Dow says it expects the challenged macroeconomic conditions of 2025 to persist in the near term for the company and the industry. In the second half of 2026 it lists three priorities: growth and innovation in attractive end markets, investing in and strengthening its portfolio, and balanced capital allocation. Management expects Transform to Outperform benefits to ramp significantly through the remainder of 2026 and into 2027, and now expects about $200 million more in benefits from the program this year, lifting total in-year self-help benefits above $1.3 billion.