Dow's Packaging Price Gain Cools After a Hot Second Quarter

The Tip Desk · October 22, 2026 · 4 min read

Third-quarter net sales were $11.3 billion, up 13% year over year, as local price rose 14% and operating EBIT reached $887 million.

Dow Inc. (DOW) reported third-quarter net sales of $11.3 billion, up 13% from a year earlier, after a 20% year-over-year increase in the second quarter. Local price rose 14%, led by Packaging & Specialty Plastics and higher polyethylene prices in all regions. Currency was flat. Volume decreased 1%, with higher volumes in all regions except Asia Pacific, where the company said impacts from the Middle East conflict were most pronounced.

GAAP net income was $525 million, or $0.62 a share. Operating earnings were $0.71 a share, compared with a loss of $0.19 a year earlier. Operating EBIT was $887 million, up $707 million year over year, which the company said was driven primarily by higher prices and benefits from collective self-help actions that more than offset higher raw materials and logistics costs.

Packaging & Specialty Plastics remained the largest profit engine. Segment net sales were $5.8 billion, up 18% year over year after a 27% increase in the prior quarter. Local price rose 17%, primarily on higher prices across both businesses in EMEAI and the U.S. & Canada. Volume increased 1%. Operating EBIT was $585 million, up $386 million from a year earlier, which the company attributed to higher integrated margins from polyethylene prices and self-help tailwinds, partly offset by higher planned maintenance. Polyethylene demand, it said, remained resilient, with year-over-year volume growth excluding supply constraints tied to the Middle East conflict. Hydrocarbons & Energy sales rose on higher price and volume for Olefins and Aromatics in EMEAI after a previously idled cracker restarted.

Industrial Intermediates & Infrastructure net sales were $3.1 billion, up 8% year over year. Local price increased 16%. Volume decreased 7%, as higher Industrial Solutions volumes were more than offset by lower Polyurethanes & Construction Chemicals volumes, including Middle East conflict impacts in both businesses. Operating EBIT was $176 million, versus a $47 million loss a year earlier, driven by higher margins, self-help tailwinds and the suspension of Sadara equity-loss recognition, partly offset by higher energy costs in EMEAI. Industrial Solutions volume growth, the company said, reflected demand for AI infrastructure and energy applications and higher ethylene oxide project-related catalyst sales.

Performance Materials & Coatings net sales were $2.3 billion, up 8% year over year. Local price increased 5% in both businesses, led by Coatings & Performance Monomers. Volume increased 3%, led by downstream silicones. Operating EBIT was $154 million, up $74 million year over year, including self-help tailwinds from the closure of the Barry, U.K. siloxanes plant. Consumer Solutions silicones volume gains in consumer, electronics and home care more than offset upstream declines after that plant shutdown. Coatings & Performance Monomers sales rose across all regions, led by acrylic monomers and architectural coatings.

By region, U.S. & Canada net sales were $4.5 billion, up 16% year over year. EMEAI sales were $3.6 billion, up 18%. Latin America sales were $1.3 billion, up 15%. Asia Pacific sales were $1.8 billion, down 3%, with volume down 12% and local price up 9%.

Cash provided by operating activities from continuing operations was $1.8 billion, up $709 million year over year and up $515 million sequentially, primarily on working capital improvements. Free cash flow was $1.1 billion, with trailing twelve-month cash flow conversion of 84%. 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. Dividends totaled $253 million.

Significant items totaled $0.09 a share, including Transform to Outperform costs of $69 million pretax, 2025 restructuring implementation costs of $31 million, a $69 million Nova litigation gain and a $53 million loss on early debt extinguishment.

Chief Executive Officer Karen S. Carter said the company is on track to achieve the upsized $700 million in growth and productivity benefits in 2026 and approximately $2 billion in total uplift by the end of next year. Self-help actions, she said, are on track to deliver more than $1 billion of EBITDA uplift in both 2026 and 2027. Carter also said the company captured sequential gains from the first of three European asset shutdowns, with total benefits expected to build through 2027.