When is a 97% drop in profit not necessarily a bad thing? Well, when the company still manages to top expectations of course. This unlikely scenario has unfolded for Michigan-based chemical firm Dow Chemical (NYSE: DOW).
Let's deal with the 97% profit drop first. This massive fall was triggered by falling sales, job cuts and the company's acquisition of Rohm & Haas, a specialty chemicals firm that Dow took over.
Despite the drop, Dow earned $24 million, or three cents per share in the first quarter. A year ago, Dow earned 99 cents per share -- there's your 97% drop. Sales fell as well, coming in at $9.09 billion. Excluding items, Dow earned 12 cents per share. As for expectations, the Street was calling for a quarterly loss of 21 cents per share and revenue of $11.69 billion.
Let's see if the stronger-than-anticipated earnings will boost the shares enough to topple intermediate-term resistance from their 20-week moving average. The stock has rallied during the past eight weeks only to come face to face with this resistance. Will this earnings announcement be enough to push the stock higher?
If the shares can power higher, there is plenty of room to run before the next potential resistance. Dow's 50-week moving average is dropping through the 21 region, which is the next potential resistance. The last time Dow managed to close a week atop this resistance was mid-May 2008. Let's see if May 2009 can be as fortuitous for Dow, this morning's announcement is a good start.
Let's deal with the 97% profit drop first. This massive fall was triggered by falling sales, job cuts and the company's acquisition of Rohm & Haas, a specialty chemicals firm that Dow took over.
Despite the drop, Dow earned $24 million, or three cents per share in the first quarter. A year ago, Dow earned 99 cents per share -- there's your 97% drop. Sales fell as well, coming in at $9.09 billion. Excluding items, Dow earned 12 cents per share. As for expectations, the Street was calling for a quarterly loss of 21 cents per share and revenue of $11.69 billion.
Let's see if the stronger-than-anticipated earnings will boost the shares enough to topple intermediate-term resistance from their 20-week moving average. The stock has rallied during the past eight weeks only to come face to face with this resistance. Will this earnings announcement be enough to push the stock higher?
If the shares can power higher, there is plenty of room to run before the next potential resistance. Dow's 50-week moving average is dropping through the 21 region, which is the next potential resistance. The last time Dow managed to close a week atop this resistance was mid-May 2008. Let's see if May 2009 can be as fortuitous for Dow, this morning's announcement is a good start.
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