Dow reported third-quarter sales fell 5% from a year earlier and sales in Asia rose 2%

Recently, Dow released the 2022inane third quarter financial report. Dow's net sales were $14.1 billion, down 5% from a year earlier; Generally accepted accounting principles (GAAP) net income was $760 million. Operating earnings before interest and tax (EBIT) were $1.2 billion, compared with $2.9 billion in the same period last year; Cash generated from operating activities (i.e., continuing operations) was $1.9 billion, down $779 million year over year and up $84 million quarter over quarter. Free cash flow of $1.5 billion; GAAP earnings per share were $1.02, and operating earnings per share were $1.11, compared with $2.75 in the year-ago period and $2.31 in the previous quarter. Total returns to shareholders for the quarter were $1.3 billion, including $800 million in share repurchases and $493 million in dividend returns.

Sales rose in Dow's functional materials and coatings segment in the third quarter, but were outpaced by declines in industrial Intermediates and infrastructure, packaging and specialty plastics. Sales were down 10% sequentially, with declines in all operating segments and regions. Higher energy costs in Europe, the Middle East, Africa and India have put a significant squeeze on Dow's profits.

During the quarter, Dow's local prices were up 3 percent from a year earlier, driven by the functional Materials & Coatings and Industrial Intermediates & Infrastructure segments. However, compared with the second quarter, local prices were down 6% Qoq, with declines in all operating segments and regions.

Dow's overall sales fell 4 percent from a year earlier, with a 12 percent decline in Europe, the Middle East, Africa and India outpaced a 2 percent rise in sales in the U.S. and Canada and Asia Pacific. Sales were down 3 per cent month on month, with sales in the Europe, Middle East, Africa and India region down 8 per cent.

Dow, chairman and chief executive, says Mr Jim Fitterling "in the third quarter of this year, dow team success to deal with the major challenge in the field of macroeconomic, we move quickly to adjust the production according to the supply chain and logistics limited situation, the resource priority for higher value products, and reduce the operation cost in all aspects of the company. That's why we continue to focus on cash flow generation and continue executing our capital allocation strategy to return $1.3 billion to shareholders.

"In the US, fundamental demand remains resilient; In the eurozone, high energy and raw material costs are fuelling unprecedented inflation and affecting demand; In China, the ongoing pandemic continues to weigh on consumer spending and infrastructure investment. Going forward, our global scale, diverse regional footprint, and flexible portfolio of raw materials and derivatives will continue to be our unique strengths. We have taken a disciplined and balanced approach to capital allocation, focused on cash flow generation, and continued to optimize our balance sheet. These successful initiatives have laid a solid foundation for us to continue to respond to the rapidly changing global landscape."

"We expect the macro environment to continue to be dynamic in the near term," Fitterling said. As a result, we have developed an action plan that is on track to deliver more than $1 billion in cost savings by 2023 and continue to leverage our many strengths in scale, diverse regional markets, and flexible portfolio of raw materials and derivatives. At the same time, we remain focused on advancing our 'decarbonization and growth' strategy to expand our competitive advantage and industry leadership through higher return investments. Our strong financial position and balance sheet, together with our continued focus on cash flow capture, gives us the flexibility to execute our capital allocation priorities, including delivering attractive shareholder returns, as we strive to create as much long-term value as possible."