Dow-Fraunhofer Sign Research Deal - Analyst Blog

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The Dow Chemical Company ( DOW )'s wholly-owned subsidiary Dow AgroSciences entered into a research agreement with a major European research firm Fraunhofer Institute for Molecular Ecology (IME), headquartered in Munich, Germany.

A multiyear agreement allows Dow AgroSciences and Fraunhofer IME to collaborate on novel biotech approaches to improving crops.

This significant agreement with Fraunhofer IME allows Dow AgroSciences' researchers to work with some of the best teams of scientists in the world for improving plant biotechnology while delivering improved products to its customers.  The deal allows Fraunhofer IME to develop some of its most advanced technologies into innovative solutions for meeting global needs and demands.

The research will be carried out at Dow AgroSciences in Indianapolis and at Fraunhofer IME in Aachen and Giessen. The financial terms of the agreement were not yet disclosed.

Fraunhofer IME is the largest applied research group in Europe with 18,000 employees. Dow AgroSciences is a top-tier agricultural company providing innovative agrochemical and biotechnology solutions globally.

In October 2011, The Dow Chemical Company earned 69 cents per share in the third quarter of 2011, ahead of the Zacks Consensus Estimate of 64 cents as well as last year's 45 cents. However, including one-time charges, the company earned 62 cents per share compared with 54 cents in the year-ago quarter.

Quarterly revenues jumped 17% year over year to $15.1 billion and were above the Zacks Consensus Estimate of $14.7 billion, driven by double-digit gains in all operating segments and geographic areas, with the largest growth in Latin America (21%) and Europe, Middle East and Africa (EMEA) (19%). In emerging geographies, sales reached $5 billion, a new quarterly record for the company.

Dow did not provide any financial guidance and anticipates demand to improve further, especially in Asia with the global economic recovery. The US and European markets have also started showing signs of improvement. Dow is also optimistic on major consumer-markets, including electronics, coatings, automotive and packaging. However, construction markets are expected to remain weak.

DOW faces stiff competition from EI DuPont de Nemours & Co. ( DD ).

Currently, Dow has a short-term (1 to 3 months) Zacks #3 Rank (Hold) and a long- term Neutral recommendation.


 
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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 The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: DD , DOW , EI

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