Yesterday, DOW released its third quarter 2019 earnings report. Its key financial data are as follows:

GAAP net income was $347 million, and EBIT was $1 billion 100 million, compared with $1 billion 600 million in the same period last year. Net sales amounted to US $10 billion 800 million, a decrease of 15% compared to the same period last year, due to a fall in global market prices due to the fall in global energy prices. Compared with the same period last year, sales decreased by 2%.

The growth in packaging, PU and silicone applications is insufficient to make up for the reduction in the sale of by-products of hydrocarbons (due to the expansion of the proportion of light raw materials in Europe and the increase in ethylene integration initiated by the new assets along the Gulf coast of Mexico). Excluding hydrocarbon and energy businesses, sales increased by 1%. Local prices fell by 12% over the same period last year, mainly due to the drop in prices of polyethylene, hydrocarbon by-products, siloxane and isocyanates. Exchange rate fluctuations reduce sales by 1%.

The operating EBIT was US $1 billion 100 million, lower than the estimated performance of US $1 billion 600 million during the same period last year, reflecting the narrowing of profit margins and the impact of Argentina's production cuts. Cost optimization effects and cost savings from shelving costs and the new capacity of the Mexico Gulf Coast make up for these factors.

Industrial solutions business plan maintenance expenditure reduction, as well as the expansion of packaging and special plastics business profit margins to promote business EBIT growth of 58 million US dollars, operating EBIT profit margin rose 80 basis points. This quarter completed the $1 billion 365 million cost optimization project of the materials science business department and removed the idle cost of US $40 million.