DOW Warms Up to Q3 Earnings: What's in the Cards for the Stock?

Dow Inc. DOW is scheduled to come up with third-quarter 2025 results before the opening bell on Oct. 23.DOW surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed twice. It has a trailing four-quarter negative earnings surprise of 44.9% on average. Dow posted a negative earnings surprise of 281.8% in the last reported quarter.While DOW is expected to have benefited from its productivity initiatives, soft demand due to weak global economic activities and pricing pressures are likely to have affected its third-quarter performance.Dow’s shares are down 58.5% over a year compared with the Zacks Chemicals Diversified industry’s 32.4% decline.Image Source: Zacks Investment ResearchLet’s see how things are shaping up for this announcement.What do DOW’s Revenue Estimates Say?The Zacks Consensus Estimate for revenues for DOW for the to-be-reported quarter is pinned at $10,175.4 million, suggesting a year-over-year decline of 6.5%.Our estimate for revenues for the Packaging & Specialty Plastics segment is currently pegged at $5,129.9 million, calling for a decline of 7% year over year. The same for the Industrial Intermediates & Infrastructure segment stands at $2,812.4 million, indicating a 5.1% year-over-year decline.Our estimate for revenues for the Performance Materials & Coatings segment is pinned at $2,080.1 million, suggesting a fall of 6.1% year over year.Factors Shaping DOW’s Q3 ResultsDemand softness in Europe and China is expected to have impacted DOW’s performance in the quarter to be reported. Lower consumer spending amid inflationary pressures is affecting demand in Europe. Construction and manufacturing activities remain soft in the region. Demand in Asia has been affected by a weaker demand recovery in China. The property sector in China remains sluggish, with declining new home prices. Inflationary pressures are impacting consumer durables and building and construction demand. Demand in infrastructure, including residential construction, also remains weak. Dow sees softness in automotive in Europe due to low demand. Soft conditions across these markets are likely to have weighed on DOW’s volumes in the third quarter.  Weak macroeconomic conditions due to disruptions caused by tariffs are expected to have affected business and consumer sentiment. Dow is also being challenged by weak siloxane prices in its Performance Materials & Coatings unit. The segment continues to see siloxane pricing pressure, partly due to supply additions in Asia. Siloxane prices remain under pressure due to competitive pricing pressure resulting from additional supply driven by capacity additions in China. While capacity additions have slowed, elevated industry supply is expected to continue to have impacted prices in the third quarter. A sizable $125 million headwind from higher planned maintenance activities, including a cracker turnaround in the U.S. Gulf Coast, is also likely to have impacted the Packaging & Specialty Plastics unit.Nevertheless, Dow is likely to have benefited from cost-saving and productivity actions. DOW is implementing targeted actions focused on reducing direct costs and labor costs. It is taking action to cut costs by $1 billion to drive margins. Dow sees around $400 million in benefits from these actions in 2025, with full benefits expected by 2026. The benefits of its cost-saving actions are likely to be reflected in its bottom line in the to-be-reported quarter.Dow Inc. Price and EPS Surprise Dow Inc. price-eps-surprise | Dow Inc. QuoteWhat Our Model Unveils for DOW StockOur proven model does not conclusively predict an earnings beat for DOW this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.Earnings ESP: Earnings ESP for DOW is -1.12%. The Zacks Consensus Estimate for the third quarter is currently pegged at a loss of 31 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Zacks Rank: DOW currently carries a Zacks Rank #4 (Sell).Basic Materials Stocks That Warrant a LookHere are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:Agnico Eagle Mines Limited AEM, scheduled to release earnings on Oct. 29, has an Earnings ESP of +16.07% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.The consensus estimate for AEM’s earnings for the third quarter is currently pegged at $1.68.Newmont Corporation NEM, slated to release earnings on Oct. 23, has an Earnings ESP of +1.32% and carries a Zacks Rank #1 at present.The consensus mark for NEM’s third-quarter earnings is currently pegged at $1.27.Kinross Gold Corporation KGC, scheduled to release earnings on Nov. 4, has an Earnings ESP of +12.65%.The Zacks Consensus Estimate for KGC's earnings for the third quarter is currently pegged at 32 cents. KGC currently carries a Zacks Rank #1. 5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They includeStock #1: A Disruptive Force with Notable Growth and ResilienceStock #2: Bullish Signs Signaling to Buy the DipStock #3: One of the Most Compelling Investments in the MarketStock #4: Leader In a Red-Hot Industry Poised for GrowthStock #5: Modern Omni-Channel Platform Coiled to SpringMost of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dow Inc. (DOW): Free Stock Analysis Report Newmont Corporation (NEM): Free Stock Analysis Report Kinross Gold Corporation (KGC): Free Stock Analysis Report Agnico Eagle Mines Limited (AEM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks