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MIDLAND, Mich. - Dow Inc. (NYSE: NYSE:DOW), a global materials science company with a market capitalization of $28.84 billion, has disclosed a series of measures aimed at achieving $1 billion in cost savings amid persistent macroeconomic challenges. The company is taking a proactive stance to enhance its long-term competitiveness and support growth objectives. According to InvestingPro data, while the stock trades near its 52-week low, net income is expected to grow this year.
The cost savings are expected to be realized primarily through a reduction in direct costs, including $500 million to $700 million in savings from purchased services and third-party contract labor. Additionally, Dow plans to decrease labor costs by reducing its workforce by approximately 1,500 roles globally. These steps are in response to what Dow’s chair and CEO, Jim Fitterling, described as a slower-than-expected macroeconomic recovery. The company maintains a strong dividend yield of 6.82%, making it an attractive option for income-focused investors. For deeper insights into Dow’s financial health and future prospects, InvestingPro subscribers can access comprehensive analysis and additional ProTips.
Dow anticipates recording a charge between $250 million and $325 million in the first quarter of 2025 for severance and related benefits, and costs to implement these actions are estimated to range from $20 million to $30 million. The company will engage with local stakeholders and comply with regional regulations and consultation processes as it implements these changes.
With manufacturing sites in 30 countries and around 36,000 employees, Dow generated approximately $43 billion in sales in 2024. The company is recognized for its leadership in markets such as packaging, infrastructure, mobility, and consumer applications, and it focuses on innovation and sustainability to drive profitable growth. Based on InvestingPro’s Fair Value analysis, the stock currently appears slightly undervalued, presenting a potential opportunity for investors. The platform’s comprehensive Pro Research Report offers detailed insights into Dow’s market position and growth prospects.
This announcement is based on a press release statement and reflects the company’s efforts to adapt to the current economic environment while preparing for future opportunities.
In other recent news, Dow Inc. reported lower-than-expected earnings for its fourth quarter, with adjusted earnings per share of $0.00, which fell short of the projected $0.29. The company’s revenue also missed the mark, coming in at $10.4 billion, under the anticipated $10.58 billion and representing a 2% year-on-year decrease. Despite these results, Dow announced plans to mitigate the impact of challenging economic conditions by cutting costs by $1 billion and reducing 2025 capital expenditures by $300-500 million. CEO Jim Fitterling expressed confidence in these measures, stating they were necessary to navigate the current economic downturn. He also highlighted the company’s optimism for demand growth in sectors like packaging, energy, and electronics. Despite a decline in net sales across all operating segments, Dow managed to increase volumes by 1% year-on-year, and generated $811 million in cash from operations during the quarter. These are among the latest developments for the company.
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