Dow swung to a $721M Q2 2026 profit ($0.99 per share) from an $835M loss as net sales rose 20% to $12.1B on 20% higher prices led by polyethylene, while volume slipped 1% and the quarterly dividend stayed at a halved $0.35.
Revenue
$12.1B
+19.7% YoY
Net income
$721M
Diluted EPS
$0.99
Overview
Dow swung from a heavy loss to a solid profit in the second quarter of 2026 (three months ended June 30). Net sales rose 20% to $12.09 billion, and almost all of that came from higher selling prices, not higher volumes. Local price (the price change measured in each region's own currency, so exchange-rate moves are stripped out) was up 20%, currency added 1%, and volume fell 1%. Net income available to Dow Inc. common stockholders was $721 million, or $0.99 per diluted share, against a loss of $835 million ($1.18 per share) a year earlier.
The driver was polyethylene, the plastic used in packaging film and Dow's largest product family. Packaging & Specialty Plastics raised local prices 30%, and the earnings release attributes that segment's profit jump to "higher integrated margins as a result of higher polyethylene prices." The 10-Q links part of the backdrop to the Middle East conflict and disruption around the Strait of Hormuz. It says the conflict tightened supply in Asia Pacific and Europe while Dow's plants in the U.S. & Canada and Latin America, where feedstock is cheaper, were not directly affected.
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Net sales
$12,092M
$10,104M
+19.7%
Cost of sales as % of net sales
82.1%
94.2%
-12.1 pts
Net income available to Dow Inc. common stockholders
$721M
-$835M
Swing to profit
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Dow's income statement has no "operating income" line. Instead, the company measures its businesses by Operating EBIT: pretax earnings before interest, excluding what it calls "significant items" such as restructuring charges. It is a non-GAAP figure (not defined by standard accounting rules), which is why the Operating EBIT margin above is not reported as a GAAP operating margin.
Where the sales growth came from
Segment
Local price
Currency
Volume
Total sales change
Packaging & Specialty Plastics
+30%
+1%
-4%
+27%
Industrial Intermediates & Infrastructure
+15%
+1%
-2%
+14%
Performance Materials & Coatings
+4%
+1%
+6%
+11%
Total Dow
+20%
+1%
-1%
+20%
By region, local price rose everywhere: Latin America +32%, EMEAI (Europe, Middle East, Africa and India) +21%, U.S. & Canada +17%, Asia Pacific +14%. Volume split the other way. It rose in Latin America (+9%) and the U.S. & Canada (+3%) but fell in Asia Pacific (-9%) and EMEAI (-4%). The 10-Q ties the Asia Pacific and EMEAI declines to the Middle East conflict. Almost all of the quarter's growth came from prices, not from selling more product.
Segment results (Operating EBIT)
Segment
Q2 2026 sales
Q2 2025 sales
Q2 2026 Op. EBIT
Q2 2025 Op. EBIT
Packaging & Specialty Plastics
$6,385M
$5,025M
$1,278M
$71M
Industrial Intermediates & Infrastructure
$3,166M
$2,786M
$246M
-$185M
Performance Materials & Coatings
$2,361M
$2,129M
$133M
$152M
Corporate
$180M
$164M
-$9M
-$59M
Total
$12,092M
$10,104M
$1,648M
-$21M
Packaging & Specialty Plastics accounted for about 78% of Operating EBIT, and its margin went from 1.4% to 20.0% of sales. The 10-Q says profit rose "primarily due to higher selling prices and the impact of the Company's self-help initiatives, partially offset by higher planned maintenance and performance-based compensation costs." Volume fell 4%, for two reasons: polyethylene sales dropped in Asia Pacific and EMEAI, and the Hydrocarbons & Energy business had planned maintenance on the U.S. Gulf Coast. An EMEAI ethylene cracker (a plant that breaks natural-gas liquids or naphtha into ethylene, the building block for polyethylene) had been idled in mid-2025. It restarted in June 2026. On feedstock, the 10-Q says only that higher raw material, feedstock and energy costs pushed cost of sales up in the quarter. Dow does not give a polyethylene margin or feedstock cost figure, so the 20-point price gain clearly outran input costs, but the filing does not show by how much.
Industrial Intermediates & Infrastructure (polyurethanes, construction chemicals, industrial solvents) went from a $185 million loss to a $246 million profit. The reasons given are higher margins, cost savings, less planned maintenance, and an accounting change. Dow stopped recording its share of losses from Sadara, its 35%-owned Saudi joint venture, in Q1 2026. It did so because Sadara-related liabilities on Dow's books had reached the full amount Dow is committed to cover. Part of this segment's improvement therefore reflects an accounting rule, not better operations. Volume fell in Polyurethanes & Construction Chemicals because of the Middle East conflict. It rose in Industrial Solutions on energy and data-center applications and new alkoxylation capacity.
Performance Materials & Coatings is the one segment where profit fell, from $152 million to $133 million, even though volume grew 6%. The earnings release cites higher fixed costs, including maintenance turnarounds and "the costs associated with the in-period shutdown of our Barry, U.K. upstream siloxanes plant."
Restructuring: Europe closures and Transform to Outperform
Restructuring and asset-related charges were $503 million in the quarter, down from $591 million a year earlier. They have two sources:
Transform to Outperform (approved January 2026): about 4,500 job cuts, expected to be substantially complete by the end of 2027. Q2 carried $445 million of severance charges, plus $81 million of "costs to achieve" (implementation costs). The 10-Q names those costs, along with higher performance-based pay, as the main reasons selling, general and administrative expenses rose to $535 million from $347 million. Dow targets at least $2 billion of near-term Operating EBITDA improvement from the program and reported $190 million delivered in the first half.
2025 Restructuring Program (asset footprint, including actions from its strategic review of European assets): a further $58 million in Q2, all in Performance Materials & Coatings plus $1 million in Industrial Intermediates. This was $8 million of asset write-downs and $50 million of exit costs related to a supply commitment. Shutdowns under this program are expected to be substantially complete by end-2027. In Q2 2025, the same program cost $591 million, including $334 million of asset write-downs.
Excluding these and other significant items ($605 million pretax in the quarter), operating EPS was $1.44, per the earnings release. GAAP profit was also helped by a low 7.9% tax rate. The 10-Q attributes it to Dow's improved ability to use foreign tax credits connected to the roughly US$1.0 billion Nova Chemicals paid in March 2026 over the jointly owned Joffre, Alberta ethylene plant.
Dividend, infrastructure stake and cash
Dividend halved. Dow declared $0.35 per share for the quarter, against $0.70 in Q2 2025. Dividends paid in the first half fell to $505 million from $990 million, which saved about $485 million in cash. There were no share buybacks in either half-year. Separately, a securities class action filed in 2025 alleges the company misled investors about its ability to sustain the dividend.
Infrastructure stake. In 2025, Dow sold 49% of Diamond Infrastructure Solutions, the entity that owns its U.S. Gulf Coast site infrastructure, to a Macquarie-managed fund: 40% in Q2 and 9% in Q3. The first-half 2025 cash flow statement shows $2,433 million of proceeds from sale of noncontrolling interests. The ongoing cost is that the fund's share of profits now leaves Dow's bottom line. Net income attributable to noncontrolling interests rose to $81 million from $34 million, and distributions to them were $158 million in the half.
Cash flow turned positive. First-half free cash flow (operating cash flow minus capital spending) was $1,313 million, against -$1,713 million a year earlier. That figure includes the Nova receipt. A further C$452 million (about US$318 million) withholding-tax refund tied to the same judgment arrived on July 15, after quarter-end. Capex guidance for 2026 is about $2.5 billion, including the Fort Saskatchewan Path2Zero cracker project. Cash stood at $3,973 million at June 30.
Credit ratings. S&P cut Dow to BBB- in February and Moody's to Baa3, both with a negative outlook. That is the lowest investment-grade tier, one notch above junk. Fitch holds BBB, stable.
Year to date
For the first six months, net sales were $21,886 million (+7%), with local price +6%, currency +2% and volume -1%. Net income available to common stockholders was $188 million ($0.25 per share), against a $1,142 million loss. That figure includes a $298 million first-quarter charge for a higher estimated liability under Dow's guarantee of Sadara's project debt, which the 10-Q attributes to "adverse business conditions impacting Sadara's operations, including the ongoing conflicts in the Middle East." Operating EBIT was $1,802 million for the half, so Q1 contributed only $154 million. Almost all of the half-year's underlying profit came in Q2.
Takeaway: This quarter's profit came mostly from higher polyethylene prices. Volume fell, and Q1 Operating EBIT was only $154 million, so the $1.6 billion Q2 figure depends on prices that the 10-Q links partly to Middle East supply disruption. The parts Dow controls more directly are the cost savings, the dividend cut and the Nova cash, and they are what has repaired cash flow for now.
Outlook
Dow gave no numeric guidance for the third quarter in its 10-Q or earnings release. Management says Transform to Outperform benefits should "ramp significantly throughout the remainder of this year and into 2027." Per the earnings release, CEO Karen S. Carter (who succeeded Jim Fitterling on July 1) now expects about $200 million more from the program this year, bringing total in-year self-help benefits to more than $1.3 billion.
Our view: the cost savings are the more dependable part of the earnings improvement. The price-driven part is exposed in two ways. If shipping through the Middle East normalizes, the supply shortage that lifted prices outside North America could ease. And with the Europe cracker back online since June, Dow's European costs are again tied to volatile regional energy prices. Watch three things in Q3: whether Packaging & Specialty Plastics can hold a margin near 20% as maintenance ends, how quickly the $405 million of accrued severance turns into cash payments, and whether the Sadara guarantee needs another markup.