Dow Stock Plunges 11.52% After 50% Dividend Cut Amid Dismal Q2 Earnings and Revenue Decline

Dow Inc. (NYSE:DOW) shares plunged 11.52% on Thursday following a dismal second-quarter report that fell far short of expectations, prompting a 50% reduction in its quarterly dividend to 35 cents per share. The chemical manufacturer posted an adjusted loss of 42 cents per share, exceeding the projected 12-cent loss, while revenue declined 7% year-over-year to $10.104 billion, missing estimates by $148 million. The dividend cut, announced alongside the results, marked a significant shift in the company’s financial strategy amid persistent macroeconomic headwinds and trade disruptions [1].

The earnings report revealed a GAAP net loss of $801 million for the quarter, a stark contrast to the $819 million operating EBIT profit in the same period last year. Sales declines were widespread across all business segments: Packaging & Specialty Plastics revenue fell 9% to $5.03 billion, Industrial Intermediates & Infrastructure dropped 6% to $2.78 billion, and Performance Materials & Coatings decreased 5% to $2.13 billion. CEO Jim Fitterling attributed the challenges to a “lower-for-longer earnings environment,” compounded by trade and tariff uncertainties that have distorted competitive dynamics in key markets [2].

Dow’s operating cash flow turned negative at $470 million, a $1.3 billion decline year-over-year, driven by compressed margins and seasonal working capital demands. The dividend reduction, effective immediately, aimed to preserve financial flexibility as the company navigated deteriorating cash flow and a debt-to-equity ratio of 103.62%. Negative levered free cash flow of $583 million further underscored the urgency of the move [3].

The stock’s sharp decline pushed shares to $26.89 at 11:58 a.m. ET, down $3.50, or 11.52%, from the previous close. Traded volume of 8.367 million shares, below the average of 10.778 million, reflected investor caution. Year-to-date returns for DOW are negative 30.00%, lagging the S&P 500’s 8.17% gain. The stock now trades near its 52-week low of $25.06, with a one-year total return of -45.77% compared to the S&P 500’s +17.23% [4].

Analysts highlighted the dividend cut as a signal of structural challenges in the chemical sector. Price targets for DOW range from $22.00 to $56.00, with an average of $34.18, suggesting potential upside of ~27% from current levels. However, the company’s 0.69% profit margin and negative cash flow raise concerns about near-term stabilization. Management forecast Q3 net sales of $10.2 billion, below consensus estimates of $10.599 billion, reinforcing investor skepticism [5].

The earnings miss and dividend reduction reverberated across broader markets. The Dow Jones Industrial Average futures dipped 0.4% as investors reacted to underperforming industrial and tech stocks. While some analysts viewed the cut as a temporary adjustment, others warned it could signal a deeper realignment of Dow’s capital structure. The absence of near-term catalysts for demand or pricing recovery has left investors wary of overexposure to the sector [6].

Sources:

[1] [Dow Inc. Cuts Dividend by 50% and the Stock Sinks](https://coinmarketcap.com/community/articles/68823b3582fa5c0266a0b8fa/)

[2] [Dow cuts high dividend in half in reaction to 'lower-for-longer' earnings](https://stockanalysis.com/news/)

[3] [Dow Inc. | Dow Chemical Stock Price](https://www.investing.com/equities/dow-chemical)

[4] [Dow, S&P 500, Nasdaq futures trade mixed as Wall Street ...](https://uk.finance.yahoo.com/news/stock-market-today-dow-sp-500-nasdaq-futures-trade-mixed-as-wall-street-weighs-google-tesla-earnings-233839498.html)

[5] [Dow Inc. Cuts Dividend by 50% and the Stock Sinks](https://finance.yahoo.com/sectors/basic-materials/chemicals/)

[6] [Dow Inc. | Dow Chemical Stock Price](https://www.investing.com/equities/dow-chemical)