The Dow Chemical Company
) has announced that its Board has approved a program which
authorizes it to buy back shares worth $1.5 billion. The
repurchases under the plan will be made over time in open market
or through privately negotiated transactions.
The share repurchase program is consistent with Dow's initiative
to reward its shareholders. Dow aims to utilize its cash
primarily in deleveraging, returning value to its shareholders
and investing in its high growth downstream businesses.
Last month, Dow released its fourth-quarter 2012 results. The
company slipped to a bigger loss in fourth-quarter 2012, hit by a
sizable restructuring charge and loss on goodwill impairment in
its Formulated Systems business. Weakness across end markets,
especially in China, and weak pricing also hurt the results.
The company posted a loss of $716 million or 61 cents a share,
significantly wider than a loss of $20 million or 2 cents a share
recorded a year ago. Charges (of around $990 million) associated
with restructuring crimped its bottom line in the fourth quarter.
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Barring one-time items (including restructuring and goodwill
impairment charges), the company earned 33 cents a share in the
quarter, up from 25 cents a year ago. That, however, missed the
Zacks Consensus Estimate by a penny.
Dow is benefiting from strong fundamentals in agriculture and
food markets and is leveraging its North American feedstock
advantage. A string of innovative products in its pipeline adds
to its strength. However, weakness in the electronics and
construction end-markets may continue in first-quarter 2013.
Dow currently retains a short-term Zacks Rank #3 (Hold).
Other companies in the chemical industry worth considering are
). All these companies retain a Zacks Rank #1 (Strong Buy).