Chemical giant The Dow Chemical Company (DOW) has announced its intention to open its North East USA Technology Center in Pfizer Inc.’s (PFE) 750,000 square feet research and development facility at Collegeville, Pennsylvania. The site is expected to be operational by the first quarter of 2013 when Dow will relocate its employees from its Spring House, Pennsylvania, campus. The company expects more than 800 jobs to remain in the county as both Spring House and Collegeville are cities within Montgomery County.
The new facility will provide all the latest tools that will help in making innovative and differentiated products useful for the customers. The office will not only have laboratory and office space but also room for further expansion. With its operations in Montgomery County, Dow will also have a foothold in the global competitive market. Dow conducted a feasibility study before deciding that it was a viable option to have research activities there.
Michigan-based Dow is a leading chemical company whose products are used across a broad spectrum of industries. The company posted earnings of 61 cents a share (excluding specific one-time items) in the first quarter of 2012, surpassing the Zacks Consensus Estimate of 59 cents. However, it was below the year-ago adjusted earnings of 82 cents.
Revenues dropped marginally year over year to $14,719 million, lagging behind the Zacks Consensus Estimate of $15,342 million. Double-digit growth across agricultural and feedstock/energy businesses were masked by declines in performance materials and performance plastics franchises.
Though Dow did not provide any specific financial guidance, it believes economic recovery will gain momentum in the second quarter and the remainder of the year. The company expects to meet its short- and long-term targets irrespective of economic conditions. Moreover, Dow sees an improving U.S. economy citing tailwind from the nation’s rich access to low-cost natural gas. Further, it benefits from strong fundamentals in agriculture and food markets.
However, weaknesses in the electronics and construction end-markets may sustain into the second quarter. Moreover, the company will continue facing challenges in Western Europe due to weak demand and sovereign debt crisis.
Dow faces stiff competition from EI DuPont de Nemours & Co. (DD). Currently, the stock retains a Zacks #3 Rank, indicating a short-term “Hold” rating. Moreover, we have a long-term “Neutral” recommendation on the company.
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