Dow Chemical (DOW) is the biggest U.S. chemical maker by sales, offering a vast range of chemical, plastic and agricultural products and services. As the company’s products are used in almost every industry, its results put a spotlight on end market scenario and demand trends for chemical products across a bevy of industries.

Dow is leveraging its North American feedstock advantage and is investing billions of dollars for setting up crackers that produces ethylene from ethane. The company is also aggressively pursuing its productivity and growth actions as well as its cost-reduction initiatives. Moreover, Dow continues to seek opportunities to optimize its portfolio by selectively divesting underperforming assets and gradually shift focus to high-growth markets.

However, Dow’s plastics business is exposed to headwinds stemming from lower oil prices. The company is also faced with pension and currency headwinds.

Let’s have a quick look at this chemical behemoth’s first-quarter release.

Estimate Trend & Surprise History

Investors should note that the earnings estimate for Dow for the first quarter has been stationary over the past week. Dow has beaten the Zacks Consensus Estimate in the trailing 4 quarters with an average beat of 12.03%. Investors have been eagerly awaiting Dow’s latest earnings report to see whether it starts 2015 with an outperformance.

Earnings Beat Again

Dow raked in adjusted earnings of 84 cents per share that topped the Zacks Consensus Estimate of 78 cents.

Revenues Miss

Dow logged net sales of $12,370 million, down 14% year over year, hurt by lower pricing resulting from changes in crude oil values and currency devaluations. That missed the Zacks Consensus Estimate of $13,019 million.

Key Stats/Developments to Note

The company envisions geopolitical and economic uncertainty through this year. However, it expects the oil market to be more favorable in the upcoming quarters. The company also returned $977 million to shareholders in the first quarter through dividends and share repurchases.

Zacks Rank

Dow currently has a Zacks Rank #3 (Hold), but that could change following the company’s earnings report which was just released.

Market Reaction

Dow’s shares rose modestly in the pre-market trading following the release. It would be interesting to see how the market reacts to the results during the trading session today.

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