Fw: Dow Chemical's 4th-Quarter Loss Widened on Charges

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Subject: Dow Chemical's 4th-Quarter Loss Widened on Charges

> Dow Chemical's 4th-Quarter Loss Widened on Charges

> Thursday, January 30, 2003 09:45 AM ET

>

>

http://www.quicken.com/investments/news_center/article/printer.dcg?story=New

> sStory/dow/20030130/ON200301300945000660.var

>

> MIDLAND, Mich. -- Dow Chemical Co. (DOW, news) posted a wider

fourth-quarter

> net loss as it recorded hefty charges for potential asbestos-related

> liabilities and restructuring activities. The company also said it expects

> the first quarter to be " particularly challenging, " as rising oil prices

add

> to its costs.

>

> The chemicals giant Thursday reported a net loss of $809 million, or 89

> cents a share, compared with a loss of $37 million, or four cents a share,

a

> year earlier.

>

> Dow, Midland, Mich., booked aftertax charges totaling $637 million. These

> included $522 million related potential asbestos liability. A West

Virginia

> jury last fall found Dow's Union Carbide Corp. (DOW, news) unit

responsible

> for causing asbestos injuries to workers, opening the possibility of

> millions of dollars in damages against the company.

>

> The latest quarter also included a charge of $147 million for merger and

> restructuring costs and expenses incurred after Stavropoulos,

Dow's

> former president and CEO, was brought back to replace CEO .

>

> Dow last month called on Mr. Stavropoulos, who had been president and CEO

> from 1995 until 2000, to replace Mr. in an effort to improve the

> company's performance.

>

> Mr. had been charged with integrating Union Carbide with Dow, but

the

> $ 7.3 billion acquisition has left Dow with high-cost plants and the

> asbestos lawsuits.

>

> Dow said excluding these and other smaller items, which are considered

> ordinary operating expenses under generally accepted accounting

principles,

> its loss came to $172 million, or 18 cents a share.

>

> Analysts were looking for break-even results excluding items, according to

> Thomson First Call.

>

> Dow's fourth-quarter sales rose 9% to $6.91 billion from $6.35 billion,

> reflecting higher prices and volume. But Dow said a 6% price increase

wasn't

> enough to offset a 35% increase in feedstock and energy costs.

>

> " This has been a very disappointing quarter, " Mr. Stavropoulos said in a

> statement. " It highlights the urgent need for a more disciplined and

focused

> approach to cost control and the continued requirement to increase prices

to

> offset higher feedstock and energy costs, " he added.

>

> For 2002, Dow reported a net loss of $338 million, or 37 cents a share,

> narrower than the loss of $385 million, or 43 cents a share, for 2001.

Sales

> slipped 1.3% to $27.4 billion from $27.8 billion.

>

> The company expects the first quarter of the year to be " particularly

> challenging, " because of rising feedstock and energy costs, and said it is

> taking steps to improve earnings and restore financial strength.

>

> Analysts surveyed by First Call are expecting Dow to earn 27 cents a share

> in the first quarter.

>

> -Judy Bocklage; Dow Newswires; 609-520-7811

>

> Dow Newswires

> 01-30-03 0945ET

>

>