MRO Magazine

Dow Corning Reports Third Quarter 2015 Financial Results


October 28, 2015
By Business Wire News

MIDLAND, Mich.

Dow Corning Corp. today announced third quarter sales of $1.39 billion and net income of $72 million. Adjusted net income in the third quarter decreased 1 percent to $108 million. Through the three quarters, Dow Corning’s adjusted net income, which excludes unusual items, has increased 6 percent despite decreased sales impacted largely by the strong United States dollar.

This Smart News Release features multimedia. View the full release here: http://www.businesswire.com/news/home/20151028005780/en/

J. Donald Sheets, executive vice president and chief financial officer, Dow Corning Corporation (Pho ...

J. Donald Sheets, executive vice president and chief financial officer, Dow Corning Corporation (Photo: Business Wire)

Adjusted net income for 2015 and 2014 excluded the impact of a derivative contract and gains on long term sales agreements. Additional information about Dow Corning’s financial results:

Third Quarter Results

  • Sales were $1.39 billion, 9 percent lower than last year’s third quarter.
  • Despite the headwinds caused by the strengthening U.S. dollar, Dow Corning continues to grow its most profitable Silicones segment product lines.
  • Dow Corning continued to grow particularly in North America, Europe, the Middle East and India.

Year-to-Date Results

  • Sales were $4.18 billion, 8 percent lower than the same time period last year; the decrease is largely driven by the strong U.S. dollar.
  • Adjusted net income has increased 6 percent to $336 million.
  • Sales from Dow Corning’s Polysilicon segment continued to decrease as the timing of customers taking product under long-term contracts resulted in fewer shipments.
                                   
    Q3 2015     Q3 2014     % Change     2015     2014     % Change
Sales (in billions)   $ 1.39     $ 1.52     -9 %     $ 4.18     $ 4.54     -8 %
Net income (in millions)   $ 72     $ 176     -59 %     $ 370     $ 476     -22 %
Adjusted net income* (in millions)   $ 108     $ 109     -1 %     $ 336     $ 318     6 %

* Adjusted net income is a non-GAAP financial measure which excludes certain unusual items. The reconciliation between GAAP and non-GAAP measures is shown in the table following the news release.

Comments from Dow Corning’s ExecutiveVice President and Chief Financial Officer J. Donald Sheets:

  • “Lagging growth in the global economy combined with the strong U.S. dollar continued to create headwinds for Dow Corning.”
  • “Dow Corning’s Silicones segment continues to grow its most differentiated and innovative product lines – which are also the most profitable – allowing us to offset some of the negative currency impact.”
  • “Dow Corning’s results continue to be impacted by fewer polysilicon shipments to Hemlock Semiconductor’s long-term contract customers. These contracts have a degree of variability when customers take their product and recent order patterns have resulted in customer orders being concentrated late last year.”

About Dow Corning

Dow Corning (www.dowcorning.com) provides performance-enhancing solutions to serve the diverse needs of more than 25,000 customers worldwide. A global leader in silicones, silicon-based technology and innovation, Dow Corning offers more than 7,000 products and services via the company’s Dow Corning® and XIAMETER® brands. Dow Corning is equally owned by The Dow Chemical Company and Corning, Incorporated. More than half of Dow Corning’s annual sales are outside the United States.

About Hemlock Semiconductor Group

Hemlock Semiconductor Group (hscpoly.com) is comprised of several joint venture companies owned in majority by Dow Corning Corporation. Hemlock Semiconductor is a leading provider of polycrystalline silicon and other silicon-based products used in the manufacturing of semiconductor devices and solar cells and modules. Hemlock Semiconductor began its operations in 1961.

Dow Corning Corporation
Selected Financial Information
(in millions of U. S. dollars)
(Unaudited)
             
 
Consolidated Income Statement Data
 
Three Months Ended September 30,Nine Months Ended September 30,
2015201420152014
 
 
Net Sales$1,389.3$1,519.9$4,177.2$4,544.7
 
Net Income
Attributable to Dow Corning$71.6$175.5$370.0$475.6
 
Adjustment for Long-Term Sales Agreements$$$(97.9)$(17.2)
 
Adjustment for Fair Value of Derivative Contract$36.2$15.3$63.4$(58.8)
 
Foreign Tax Credit$$(82.0)$  $(82.0)
 
Adjusted Net Income1$107.8$108.8  $335.5  $317.6  

1

 Adjusted Net Income is a non-GAAP financial measure which excludes certain unusual items and which reconciles to Net Income as shown.
Consolidated Balance Sheet Data
       
September 30, 2015December 31, 2014
Assets
 
Current Assets$4,478.9$4,712.0
Property, Plant and Equipment, Net5,172.15,406.8
Other Assets  899.0  1,026.3
$10,550.0$11,145.1
 
Liabilities and Equity
 
Current Liabilities$1,444.1$1,448.2
Other Liabilities5,425.96,070.2
Equity  3,680.0  3,626.7
$10,550.0$11,145.1

Dow Corning
Jarrod Erpelding, 989.496.1582
Jarrod.Erpelding@dowcorning.com