Dow Operating EPS of $0.71 Beats the $0.64 Estimate as Net Sales Rise 13% to $11.3 Billion

Dow Inc. reported third-quarter 2026 results on Thursday, Oct. 22, with operating earnings per share of $0.71, above the $0.64 average estimate, and net sales up 13% year over year to $11.267 billion.

The operating figure is the cleanest read on the quarter, and it needs its basis stated plainly: operating EPS of $0.71 excludes significant items totaling $0.09 per share, primarily costs of the company's self-help actions, and it swung from an operating loss of $0.19 per share in the year-ago quarter — a return to profit, not a growth rate off a negative base. GAAP earnings per share, the reported figure after those items, were $0.62, on GAAP net income of $525 million. The $0.07 gap between the operating result and the estimate is TickerGrove's calculation from the reported and estimated figures. No revenue yardstick is stated here: the tallies in circulation for sales expectations conflict, so the sales line is reported on its own terms, up 13% with increases in all operating segments.

Prices carried the quarter; volumes did not

Local price rose 14% year over year, led by Packaging & Specialty Plastics, with higher polyethylene prices in all regions, while currency was flat and volume fell 1%. Volumes rose in every region except Asia Pacific, where the company said impacts from the Middle East conflict are most pronounced. Reporting on Thursday attributed the higher prices in part to a supply shortage after the closure of the Strait of Hormuz following the escalation of the Iran conflict in late February disrupted oil and petrochemical flows, tightening global chemical supplies and driving a sharp increase in plastics and polymer prices. Operating EBIT was $887 million, up $707 million year over year, which the company attributed primarily to higher prices and benefits from its self-help actions, more than offsetting higher raw materials and logistics costs.

Packaging led, and every segment grew

Packaging & Specialty Plastics net sales were $5.778 billion, up 18%, with local price up 17% and volume up 1%; segment operating EBIT was $585 million, up $386 million, on higher integrated margins from higher polyethylene prices and self-help tailwinds, partly offset by higher planned maintenance. Industrial Intermediates & Infrastructure net sales were $3.058 billion, up 8%, as local price rose 16% and volume fell 7%, with lower Polyurethanes & Construction Chemicals volumes reflecting Middle East conflict impacts in both of the segment's businesses; segment operating EBIT was $176 million, against a $47 million loss a year earlier. Performance Materials & Coatings net sales were $2.250 billion, up 8%, with local price up 5% and volume up 3%, led by downstream silicones growth; segment operating EBIT was $154 million, up $74 million.

Cash generation was the other half of the print

Cash provided by operating activities from continuing operations was $1.839 billion, up $709 million year over year on improved earnings and working capital, and up $515 million sequentially, primarily on working capital improvements; the company said it released more than $400 million of working capital in the quarter and reduced debt by approximately $600 million year to date. Free cash flow was $1.1 billion, a non-GAAP measure as the company labels it, with trailing twelve-month cash flow conversion of 84%. Dividends returned to shareholders totaled $253 million in the quarter. Chief Executive Karen S. Carter said in the release: "Dow delivered a solid third quarter, driven by targeted downstream growth and disciplined execution against an evolving macro backdrop." She added that the self-help program, including the 2025 $1 billion cost program, the European asset actions and Transform to Outperform, is on track for the upsized $700 million in growth and productivity benefits in 2026 and approximately $2 billion in total uplift by the end of next year — forward-looking company expectations, not results.

What to watch: costs, demand and the asset review

The open questions sit on the cost and demand side rather than in this quarter's price line. Reporting on Thursday noted Dow is reviewing non-producing assets across its portfolio, including power and steam facilities and pipelines, as the industry grapples with higher feedstock and energy costs amid weak demand in key markets. The company said benefits from the first of its three European asset shutdowns should build through 2027, and that its self-help actions are on track to deliver more than $1 billion of EBITDA uplift in both 2026 and 2027 — again, company expectations. What to watch next is whether polyethylene pricing holds if Hormuz-related tightness eases, whether Asia Pacific volumes recover, and whether the volume line, down 1% this quarter, returns to growth without giving back the price gains.