Q2 EBITDA guidance of $2B, driven by 26 cents margin improvement
Dow reported solid Q1 results with a sharp inflection in March due to the Middle East conflict. Management guided Q2 to ~$12bn revenue and $2bn EBITDA, highlighting a 26-cent/lb margin improvement that only includes April price increases. The conflict has taken ~20% of global oil capacity and half of ethylene/polyethylene supply offline, with a logistics unwind expected to last 275+ days, creating sustained pricing power and upside for North American producers. Q1 revenue $9.8bn, EBITDA $873mn; sequential volume growth 3% despite January/February solid orders before conflict.
Buzzberg 분석Q2 EBITDA guidance of $2B, driven by 26 cents margin improvementDow reported solid Q1 results with a sharp inflection in March due to the Middle East conflict. Management guided Q2 to ~$12bn revenue and $2bn EBITDA, highlighting a 26-cent/lb margin improvement that only includes April price increases. The conflict has taken ~20% of global oil capacity and half of ethylene/polyethylene supply offline, with a logistics unwind expected to last 275+ days, creating sustained pricing power and upside for North American producers. Q1 revenue $9.8bn, EBITDA $873mn; sequential volume growth 3% despite January/February solid orders before conflict.전체 분석 보기분석 접기
Dow reported solid Q1 results with a sharp inflection in March due to the Middle East conflict. Management guided Q2 to ~$12bn revenue and $2bn EBITDA, highlighting a 26-cent/lb margin improvement that only includes April price increases. The conflict has taken ~20% of global oil capacity and half of ethylene/polyethylene supply offline, with a logistics unwind expected to last 275+ days, creating sustained pricing power and upside for North American producers. Q1 revenue $9.8bn, EBITDA $873mn; sequential volume growth 3% despite January/February solid orders before conflict.
Q2 guidance: revenue ~$12bn, EBITDA ~$2bn, driven by pricing gains (April +30¢/lb, May +20¢/lb announced) and expanding margins.
Middle East conflict has disrupted ~20% of global oil capacity and ~50% of ethylene/polyethylene supply; Strait of Hormuz closure creating severe logistics bottlenecks.
Management estimates 275+ days to unwind supply chains even after a ceasefire, meaning tight markets through at least 2026.
Revenue$9.794B
+4% QoQ
EPS$-0.14
+59% QoQ
Gross margin6.53%
reported
Op margin-0.32%
reported
이번 분기에 달라진 점
01
Guidance
Q2 EBITDA guidance of $2B, driven by 26 cents margin improvement
Guidance · revenue to $12B
02
Supply
Supply disruption may last 6-18 months, pricing upside likely
May PE price increase not included in Q2 guidance, upside potential
Q2 guidance: revenue ~$12bn, EBITDA ~$2bn, driven by pricing gains (April +30¢/lb, May +20¢/lb announced) and expanding margins.
04
Equity Earnings
SADARA equity losses suspended under GAAP; cash commitments ~$100M/year
Middle East conflict has disrupted ~20% of global oil capacity and ~50% of ethylene/polyethylene supply; Strait of Hormuz closure creating severe logistics bottlenecks.
수요 및 자본지출
수요
수주 및 전환
Management's forward guidance for Q2 revenue of ~$12bn and EBITDA of $2bn represents a sharp sequential improvement, driven by sustained supply disruptions from the Middle East conflict, pricing power across all segments, and self-help cost savings. The tone is confident and bullish, with explicit upside potential to the guide.
자본지출
투자 및 생산능력
Management emphasized disciplined capital allocation, with capital expenditures expected at or below depreciation and amortization across the cycle, prioritizing high-return investments in advantaged assets. They confirmed the Alberta project remains the only planned major project, and highlighted the new polyethylene train in Freeport, Texas as a recent incremental growth investment delivering re
톤 · Confident
Management expressed confidence in capturing upside from supply disruptions, citing strong pricing momentum, self-help actions, and structural advantages.
공급망 알파
A1
Approximately 20% of global oil capacity and half of global ethylene/polyethylene supply is offline or constrained due to the Middle East conflict, creating a supply shock three times the scale of Winter Storm Uri.
“Roughly 20% of global oil capacity is currently offline and approximately half of global ethylene and polyethylene supply is either offline, constrained, or directly impacted.”
The logistics unwind after a potential reopening of the Strait of Hormuz is estimated at 275+ days, meaning supply tightness will persist through at least 2026 and into 2027.
“…when I was at Sarah Week, really at the very beginning of the conflict, early March, I mentioned that we did some modeling at that time that it would be 275 days or longer for the supply chain disruption to unwind.”
Dow has already announced price increases of 30 cents/lb for April and 20 cents/lb for May for polyethylene, with the Q2 guide including only the April increase – meaning significant sequential earnings upside if May holds.
“If you look at the announcements for the month of April, we have 30 cents per pound on the table. And then we have another price increase out there for the month of May of 20 cents.”
Approximately 20% of global oil capacity and half of global ethylene/polyethylene supply is offline or constrained due to the Middle East conflict, creating a supply shock three times the scale of Winter Storm Uri. — This disruption is forcing price increases far beyond typical cycles and will likely lead to accelerated capacity rationalization and project delays, benefiting North American producers with cost-advantaged feedstock.
Karen S. CarterChief Operating Officer; Incoming Chief Executive Officer (effective July 1, 2026)
… regionally insulated from these disruptions. In addition, U.S. Gulf Coast NGOs, including Ethane, continue to be largely unimpacted. All of these factors underscore the benefits of Dow's cost advantage footprint in the Americas. Next on slide eight, we'll unpack some of the current regional and industry impacts in more detail. In the two months since the conflict began, the scale of disruption we have seen is unprecedented. Roughly 20% of global oil capacity is currently offline and approximately half of global ethylene and polyethylene supply is either offline, constrained, or directly impacted. These are unparalleled numbers reflecting a combination of physical infrastructure damage, feedstock limitations, and severe logistics disruptions. Transit through the region remains significantly impaired largely driven by the ongoing disruption in the Strait of Hormuz. And the disruption has been amplified across Asia and Europe, tightening feedstock availability and pushing producers to reduce production or increase prices to cover the rapidly escalating costs occurring from the conflict. Looking across regions, a large portion of Middle East capacity remains offline with increasing …
The logistics unwind after a potential reopening of the Strait of Hormuz is estimated at 275+ days, meaning supply tightness will persist through at least 2026 and into 2027.
Dow has already announced price increases of 30 cents/lb for April and 20 cents/lb for May for polyethylene, with the Q2 guide including only the April increase – meaning significant sequential earnings upside if May holds.
Karen S. CarterChief Operating Officer; Incoming Chief Executive Officer (effective July 1, 2026)
… side, I think for the questioner, I mean, I think we should go back to January and remember that you got 5 cents in January. And then in March, you know, in relation to the Middle East crisis, there was another 10-cent settlement. If you look at ACC data for the month of March, the way I would couch it is that it was a record month. You know, demand has remained steady, but both exports and domestic sales set second highest month ever record. And then if you look at overall total sales, it was also a record as well. Industry operating rates surged to 97% while DDI declined. So all of that sets us up for, you know, strong price momentum. If you look at the announcements for the month of April, we have 30 cents per pound on the table. And then we have another price increase out there for the month of May of 20 cents. So when you look at the $2 billion dive that we have for second quarter, there's 26 cents per pound of margin improvement globally that's baked into that. And that's also aligned with CMA views. So based on Jim's comment around the duration, we believe that there's more room for prices to move up. And as we do that, that will present upside to the $2 billion guide.
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