Dow Corning Profits Fall On Materials Price Increases
Midland-based Dow Corning Corp. Thursday reported net income of $191 million in the second quarter ended June 30, down 14 percent from $221 million a year earlier.
Revenue was $1.67 billion, up 8 percent from $1.54 billion a year earlier.
Dow Corning said demand continues to grow globally for its silicon-based products, but there were also sharp increases in prices for materials and energy as well as higher operating expenses, which hurt profits.
Also, Dow Corning said external factors such as Japan’s tsunami and earthquake and unrest in the Middle East also depressed net income results.
For the six months, net income was $370 million, down 16 percent from $439 million a year earlier. Revenue was $3.25 billion, up 12 percent from $2.9 billion a year earlier.
“While demand remains solid for Dow Corning’s silicon-based materials, we’ve seen pressure on our profits in the first half of 2011 from sharply rising raw materials and energy prices,” said Dow Corning executive vice president and CFO J. Donald Sheets. “We’re countering these challenges by focusing on the efficiency of our business and by continuing to invest in innovation to serve high-value growth opportunities. Dow Corning’s silicones segment continues to see significant growth in emerging economies throughout Asia, Latin America and Eastern Europe, despite the global economic volatility that has challenged all businesses in 2011. Dow Corning’s polycrystalline silicon segment through our Hemlock Semiconductor Group joint ventures continues to sell all of its production, and remains sold out for the foreseeable future. While there has been some softening in the solar industry in 2011, we believe the solar industry will continue to grow at a rapid pace over the long-term as regions seek clean, renewable, domestically generated sources of energy.”
Dow Corning provides 7,000 silicone and silicon-based products and services to more than 25,000 customers worldwide. Dow Corning is equally owned by Midland’s Dow Chemical Co. and New York-based Corning Inc.
More at www.dowcorning.com.