Dow Inc delivered QQ3 2025 results that show a modest top-line while stabilizing margins in a volatile chemical cycle. Revenue totaled $9.973 billion, down 8.3% year-over-year and 1.3% quarter-over-quarter, with a gross profit of $689 million and a gross margin of 6.9%. Operating income was $159 million (operating margin of 1.59%), and net income reached $62 million, or an EPS of $0.087. The quarter exhibited a sharp sequential improvement in profitability (Q2 to Q3), rising from $9 million of operating income to $159 million and from a net loss in Q2 to a positive net income in Q3, aided by a $54 million tax benefit and other income dynamics that offset higher financing costs.
Management commentary is not embedded in the provided data set, but the financials illustrate an economy-sensitive, highly leveraged platform with positive free cash flow generation. EBITDA was $979 million (EBITDA margin ~9.8%), underscoring the company’s ability to cover its operating needs while funding capex and dividends. However, interest expense remained sizable at $221 million, contributing to an interest coverage of approximately 0.72x, signaling vulnerability to rising rates and the ongoing need for leverage management. Cash flow per share (OCF) was $1.605 and free cash flow per share was $0.802, with cash per share at $6.56 and a modest dividend yield of 1.55%. The balance sheet shows solid liquidity (current ratio ~1.94) but a leverage profile that requires monitoring (debt ratio ~0.322; total debt to capitalization ~0.528).
Looking ahead, the growth narrative hinges on commodity price cycles, end-market demand in packaging, coatings, and infrastructure, and the ability to convert volume and mix into durable margin gains while gradually strengthening balance sheet metrics. Relative valuation metrics imply a stock priced for stability rather than aggressive growth, with a P/E near 65x and a P/B around 0.92x. The investment case centers on improving pricing power, continued cost discipline, and deleveraging to lift interest coverage and sustain healthy FCF generation.