Dow Corning Profits, Sales Fall

MIDLAND -- Dow Corning Corp. Tuesday reported lower sales and net income in the first quarter of 2012 compared with year-ago figures.

Net income was $70.5 million on sales of $1.52 billion, compared to net income of $179 million on sales of $1.58 billion a year earlier.

The company blamed global price pressure coupled with high raw material costs contributed to a decline in profit margins.

"As expected, this was a difficult quarter due to oversupply in both the silicone and polycrystalline silicon industries combined with rising raw materials and energy costs," said Dow Corning executive vice president and CFO J. Donald Sheets. "While global demand continues to grow for our silicone-based materials, significant pricing pressure is impacting our performance."

Sheets said Dow Corning's joint venture Hemlock Semiconductor Group "will continue to be challenged by the oversupplied polycrystalline silicon industry throughout 2012. As a cost-competitive manufacturer in both the silicone and polycrystalline silicon segments, we are well positioned to compete during this period of oversupply. Protecting our competitive cost position at both Dow Corning and Hemlock Semiconductor remains essential to our long-term success, and we are aggressively pursuing opportunities to increase efficiency and reduce costs in our operations."

A global leader in silicones, silicon-based technology and innovation, Dow Corning offers more than 7,000 products and services via the company's Dow Corning and Xiameter brands to more than 25,000 customers worldwide.

Dow Corning is equally owned by Midland-based Dow Chemical Co. and New York-based Corning, Inc.

Hemlock Semiconductor Group is comprised of several joint venture companies among Dow Corning Corporation, Shin-Etsu Handotai, and Mitsubishi Materials Corp. Hemlock Semiconductor is a leading provider of polycrystalline silicon and other silicon-based products used in the manufacturing of semiconductor devices, and solar cells and modules.