The Dow Chemical Company announced fourth quarter sales of $6.9 billion, compared with $6.3 billion a year ago. Dow recorded a loss in quarterly earnings before interest, income taxes, and minority interests (EBIT) of $1.1 billion, a loss in net income of $809 million and a loss in earnings per share of $0.89. Two significant items impacted results for the quarter, including a $828 million pretax charge by Union Carbide Corporation (Union Carbide) for asbestos-related expenses and pretax merger-related expenses and restructuring of $225 million.
Excluding unusual items, Dow reported a loss in EBIT of $99 million, a loss in net income of $172 million, and a loss in earnings per share of $0.18 for the fourth quarter of 2002. The substantial decline in EBIT compared with a year ago was principally the result of a margin squeeze in Dow's chemicals and plastics businesses.
"This has been a very disappointing quarter. It highlights the urgent need for a more disciplined and focused approach to cost control and the continued requirement to increase prices to offset higher feedstock and energy costs," said William S. Stavropoulos, Dow's CEO.
Sales for the quarter increased 9 percent from a year ago, reflecting 6 percent higher price and 3 percent higher volume. Volume was up in all segments except Agricultural Sciences. On a geographic basis, volume growth was strongest in Latin America and Asia Pacific, and was weakest in the United States.
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