Dow Corning Sales, Profits Plunge In 2012

MIDLAND -- Dow Corning Corp. Friday reported its financial performance for the fourth quarter and full year of 2012.

Dow Corning recorded 2012 sales of $6.12 billion, down from $6.43 billion in 2011. Net income was $188 million, down from $806 million a year earlier.

The company said oversupply, economic volatility and high raw material costs significantly reduced the company's profits.

Adjusted net income for 2012 excluded charges for asset abandonments and restructuring expenses. Adjusted net income for 2011 excluded a gain on long-term sales agreements. Adjusted net income was $338 million, down 45 percent from 2011.

For the fourth quarter, revenue was $1.48 billion, 3 percent lower than $1.52 billion in last year's fourth quarter. The net loss was $101 million, down from net income of $260 million a year earlier.

Adjusted net income was $69 million, 10 percent lower than last year's fourth quarter.

Dow Corning's Hemlock Semiconductor Group joint ventures continued to be challenged by significant oversupply in the polysilicon industry and the threat of potential duties on its products sold into China.

"Oversupply in the silicone and polycrystalline silicon industries, as well as persistently high raw material costs and global trade policy instability impacted our financial performance significantly in 2012," said Dow Corning executive vice president and CFO J. Donald Sheets. "While we expect these conditions to last well into 2013, Dow Corning's strategy for long-term success is clear and robust, and our foundation is financially strong. We are taking actions to strengthen our ability to maintain our competitive position in the marketplace and enable us to continue to invest in developing innovative products for our customers. We have a strong product portfolio that includes a mix of world-class, highly differentiated products together with a balanced portfolio of highly innovative new materials to ensure our long-term success. We also continue to aggressively pursue opportunities to increase efficiency and reduce costs in our operations. The unresolved trade disputes among the U.S., China and Europe are a major factor in Hemlock Semiconductor's business, as the threat of tariffs on U.S. polysilicon imported into China has significantly decreased orders from China, which is home to one of the largest markets for solar polysilicon."

Dow Corning, a global leader in silicones and silicon-based technology, provides more than 7,000 products and services to more than 25,000 customers worldwide.

Hemlock Semiconductor Group is comprised of several joint venture companies among Dow Corning Corp., 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. Hemlock Semiconductor began its operations in 1961.