Dow AgroSciences, a wholly owned subsidiary of
The Dow Chemical Company
) recently announced collaboration with the Australian Centre for
Plant Functional Genomics (ACPFG) to enhance the quality of crops.
Per the agreement, both the companies will utilize their expertise
to develop plants that will possess higher tolerance against
environmental stress and exhibit improved agronomic performance.
However, the financial terms of the deal were not divulged.
Dow expects the collaboration to be beneficial as ACPFG is a leader
in plant genetics and genomics research, and boasts unique
capability of understanding the plants stimulus to environmental
changes. On the other hand, ACPFG believes that the collaboration
with DOW will provide greater access to international techniques
Michigan-based Dow is a leading chemical company, whose products
are used across a broad spectrum of industries. The company posted
earnings of 55 cents a share in the second quarter of 2012, missing
the Zacks Consensus Estimate of 64 cents and significantly trailing
the year ago earnings of 85 cents. Dow recorded a profit of $649
million in the quarter, a roughly 34% decline from the year-ago
level due to weak economic conditions in Europe and soft demand.
Revenues tumbled 10% to $14,513 million, falling behind the Zacks
Consensus Estimate of $15,961 million. Sales fell across all
segments except Agricultural Sciences, which has recorded
double-digit revenue growth in the quarter. Revenues in Europe slid
10%, largely due to currency headwinds.
The Agricultural Sciences segment registered record revenues of
$1.7 billion, a 12% rise from the year-ago quarter. Volumes in the
segment climbed 10% while prices rose 2%.
Looking ahead, Dow sees lower-than-expected recovery in global
economy in the second half of 2012. The company plans to beef up
cost reduction and efficiency programs to deal with the challenging
Dow faces stiff competition from
EI DuPont de Nemours & Co.
). Currently, the stock retains a Zacks #3 Rank, which translates
into a short-term (1 to 3 months) Hold rating. Moreover, we have a
long-term Neutral recommendation on the company.
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