Dow Revamps Business Structure - Analyst Blog

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U.S. Chemical kingpin Dow Chemical ( DOW ) is remodeling its business structure and setting up an executive committee. The Michigan-based company said that the move will help it to deliver better results in a challenging environment and provide it with an optimal structure that will allow it to better serve its customers and build markets globally.  

The company noted that it will immediately do away with the current business division structure and move to a "Global Business Unit" model that will have business presidents. The business presidents, who will report to a new executive committee, will be responsible for delivering incremental earnings as well as the advancement and execution of the company's strategy.

The five-member executive committee will frame the overall direction and strategy for the company, optimize resources and monitor and deliver results. The committee will be headed by Andrew N. Liveris, Dow's chairman and CEO. It also includes executive vice presidents James R. Fitterling, Joe Harlan and Howard Ungerleider. The company will announce the business presidents shortly.

Dow posted lackluster second-quarter 2012 results on July 26, with both revenues and earnings largely missing the Zacks Consensus Estimates. The results were hit by the beleaguered economic conditions in Europe and weak demand.

The company witnessed slowing economic activity in the second quarter, leading to frail demand for its products. It contends with soft electronics and construction end-markets and is facing challenges in Western Europe due to the prevailing recessionary conditions.

Dow sees lower-than-expected recovery in global economy in second-half 2012. The company continues its cost-reduction initiatives under its "Efficiency for Growth" program to cope with the difficult macroeconomic environment.

Dow, which competes with EI DuPont de Nemours & Co. ( DD ), currently holds a short-term Zacks #3 Rank (Hold). We currently have a long-term Underperform recommendation on the stock.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: DD , DOW , EI

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