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Earnings news positive sign for area economy
Published October 28, 2009
Healthy earnings reports from two of the area’s major employers, Dow Chemical Co. and BASF, are welcome signs that, at least in some quarters, the lethargic economy might be regaining some steam.
Of course, the news could be particularly favorable to our neck of the woods, the heart of the nation’s petrochemical industry. Dow reported Thursday its third-quarter earnings jumped 86 percent from a year ago, mainly by offsetting declining sales by divestiture of some assets.
Dow Chairman and CEO Andrew N. Liveris also credited reduced operating costs of more than $380 million in the third quarter and more than $1 billion since the start of 2009, and he said the company has made significant progress on acquisitions despite sales for the quarter falling 22 percent from $12.05 billion to $11.85 billion.
Liveris also gave a rosier outlook for the future, noting, “The economic outlook for the rest of 2009 appears to be stabilizing with strong growth in Asia Pacific, especially China, and other emerging geographies. The global economy is now on firmer footing, and, in our view, the United States economy is beginning a slow and tenuous recovery …”
The economic picture also is looking brighter at BASF, which reported sales and earnings for the third quarter would be better than expected because of improved demand in Asia and South America, The Facts reported last week. BASF will release its official third-quarter earnings report Thursday.
The company’s optimistic statement is a switch from July, when the German chemical maker reported it was bracing for a tough second quarter after net profit had fallen 74 percent because of poor global markets.
Area BASF representatives, including Freeport site General Manager Art Colwell, say increased demand already is having a local effect, with production trends on the increase.
While the recovery process could remain slow and fragile, area residents with a stake in the success of these companies can take some heart signs of a recovery are being seen.
This editorial was written by Dale Dimitri, copy editor for The Facts.
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