Earnings Live: DOW Slices Dividend, Full Coverage and Analysis

Packaging & Specialty Plastics

• Sales: $5.03B (▼9% YoY)

• Op. EBIT: $71M (▼$632M YoY)

• Issues: April tariff chaos sank prices by $0.03/lb; Poly-7 ramp cut merchant ethylene sales

• Outlook: Margin and volume rebound expected in Q3; July price hikes “fully baked in” to forecast

Industrial Intermediates & Infrastructure

• Sales: $2.79B (▼6%)

• Op. EBIT: -$185M

• Headwinds: Weak PU demand, China import pressure, delayed construction recovery

• Offsetting tailwinds: New Seadrift alkoxylation unit will support Q3 rebound

Performance Materials & Coatings

• Sales: $2.13B (▼5%)

• Op. EBIT: $152M (▲$6M YoY)

• Strength: Downstream silicones in mobility and personal care drove growth

• Caution: Siloxanes pricing remains depressed from Q2 lows in China

CEO Jim Fitterling and CFO Jeff Tate emphasized that Dow’s long-term earnings power remains near $8.6B in EBITDA, consistent with 2018–2021 levels, but that the timeline for recovery has clearly shifted:

“We’re in year three of this downturn… this is not a dividend reset for payout’s sake — this is about protecting long-term shareholder value,” said Fitterling

“You can’t just flip on growth. These projects need to be built now to be ready when the upcycle comes,” he added, noting Poly-7 is already sold out.

Dow made a bold move in Q2, announcing a 50% reduction in its quarterly dividend from $0.70 to $0.35 per share — its first cut since becoming an independent company. The move, which slashes Dow’s annual dividend obligation by roughly $1 billion, is being framed as a necessary step to preserve financial flexibility amid what CEO Jim Fitterling called one of the “longest downturns” in industry history.

With the earnings pressure the downturn has created, the fixed dollar amount of our dividend was outsized… this limited our flexibility to navigate the cycle,”

CEO Jim Fitterling

The dividend cut follows two rounds of job reductions this year and the closure of three upstream assets in Europe, as Dow takes an aggressive posture to protect its investment-grade credit rating and free up capital for core reinvestment.

Despite the halving, the dividend remains competitive:

• Yield still exceeds 4.5%, ranking Dow among the top 30 dividend payers in the S&P 500.

• Management reiterated a commitment to returning ~65% of operating net income via dividends and repurchases across the cycle.

this is not a signal that our investment thesis has changed — it’s a shift in timing, not strategy

CFO Jeff Tate

In short, Dow is preserving optionality at the bottom of the cycle — aiming to come out stronger, more agile, and better positioned for capital deployment when the recovery arrives.