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Dow Chemical Third Quarter Earnings Preview
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DOW
On Thursday, October 25, 2012, Dow Chemical (NYSE:DOW) will announce its third quarter earnings. The consensus analyst estimate has dropped from 39 cents a share to the current estimate of earnings of 37 cents a share.
Investors should care about a company's quarterly earnings because it shows the state of the business over the past 90 days and provides guidance for the following 90 days. SEE: Everything Investors Need To Know About Earnings
What to Expect: This is a drop from the consensus estimate three months ago of 65 cents. For the fiscal year, analysts are projecting earnings of $1.95 per share.
Revenue for the quarter is expected to be $14.22 billion, short of last year's reported figure of $15.11 billion by 5.9%. Revenue of $57.71 billion is expected for the fiscal year.
Company Performance: Revenue has increased 2.5% on average over the past four quarters. The biggest jump was a rise of 17.4% from the year-earlier quarter in the third quarter of the last fiscal year.
DOW's P/E ratio of 19.0 is above the industry average of 13.36. This could mean that the market is expecting big things over the next few months or years. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Can Investors Trust the P/E Ratio?
The stock price has fallen slightly over the past quarter to $29.86 from $30.05 on July 24, 2012. Dow's worst recent stretch was when its stock price fell $2.18 per share between September 17, 2012 and September 28, 2012.
The Competition: Dow Chemical produces chemicals, plastic materials, agricultural, advanced materials, and other products and services, including insurance. Thirteen of 18 analysts rate Dow a hold.
The company's closest competitor in the chemicals - plastics and rubber industry is Ashland (ASH). Analysts are less optimistic about Dow than about Ashland. Eight out of nine analysts rate the latter a buy compared to two of 18 for the former.
Investors should care about a company's quarterly earnings because it shows the state of the business over the past 90 days and provides guidance for the following 90 days. SEE: Everything Investors Need To Know About Earnings
What to Expect: This is a drop from the consensus estimate three months ago of 65 cents. For the fiscal year, analysts are projecting earnings of $1.95 per share.
Revenue for the quarter is expected to be $14.22 billion, short of last year's reported figure of $15.11 billion by 5.9%. Revenue of $57.71 billion is expected for the fiscal year.
Company Performance: Revenue has increased 2.5% on average over the past four quarters. The biggest jump was a rise of 17.4% from the year-earlier quarter in the third quarter of the last fiscal year.
The stock price has fallen slightly over the past quarter to $29.86 from $30.05 on July 24, 2012. Dow's worst recent stretch was when its stock price fell $2.18 per share between September 17, 2012 and September 28, 2012.
The Competition: Dow Chemical produces chemicals, plastic materials, agricultural, advanced materials, and other products and services, including insurance. Thirteen of 18 analysts rate Dow a hold.
The company's closest competitor in the chemicals - plastics and rubber industry is Ashland (ASH). Analysts are less optimistic about Dow than about Ashland. Eight out of nine analysts rate the latter a buy compared to two of 18 for the former.
by
Investopedia Staff
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