Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 23, 2026 · Beat 4 of last 5 quarters
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Dow's results underscore the resilience of the Americas feedstock advantage amid global supply disruptions, supporting the buildout of cost-advantaged capacity. The company's focus on data center thermal management solutions (e.g., Dow Coolant Care Network) and specialty silicones for electronics/mobility aligns with AI infrastructure demand, though not explicitly quantified. The restart of low-cost crackers and shutdown of high-cost assets reflect ongoing portfolio optimization to enhance competitiveness in a volatile environment.
Dow delivered strong Q2 results with net sales of $12.1 billion (up 20% YoY) and operating EBITDA of $2.3 billion, driven by higher polyethylene pricing and improved margins. The company completed its $1 billion cost savings program, shut down its Barry siloxanes unit, and restarted its Terneuzen cracker. Self-help actions delivered over $300 million in benefits during the quarter. Segment performance was mixed: Packaging & Specialty Plastics saw strong price gains, Industrial Intermediates & Infrastructure improved on higher margins and a land sale, while Performance Materials & Coatings saw lower EBIT due to maintenance and shutdown costs.
Management guided Q3 2026 EBITDA to approximately $1.7 billion, reflecting the June North American polyethylene price settlement and normal seasonal patterns, partially offset by $130 million in self-help benefits. They raised the full-year self-help target to over $1.3 billion (up $200 million), with Transform to Outperform now expected to deliver approximately $700 million this year. The company remains confident in the $2 billion total Transform to Outperform opportunity by the end of next year. Management highlighted continued volatility from Middle East conflict, with upside potential from recent oil price increases and polyethylene price hikes. They remain focused on deleveraging, with no share buybacks expected in 2026.
“We are not waiting for conditions to turn in our favor. We are leading with deliberate actions and controlling what we can control, and that rigor is clear in our second quarter results.”
on Self-help and execution
“So if they do occur, that would be an upside to the $1.7 billion guide. But what I would say is that things continue to be volatile. We're going to work on maximizing the quarter, as we always do.”
on Q3 guidance and upside potential
“We are seeing customers really focus on supply reliability is where our global asset footprint has really been a benefit to us because we've been able to meet the demand across all of our businesses.”
on Supply reliability advantage
How are you factoring in the recent rally in crude oil and continued Strait of Hormuz blockage into your polyethylene pricing assumptions? And could China restock given destocking?
Karen explained the Q3 guide assumes a $0.10/lb decline in global integrated margins, including the $0.15 June settlement and no further price movement. However, recent oil and feedstock increases, plus declining China inventories, have led to a $0.05/lb price increase announcement in North America. If these dynamics persist, it could be upside to the guide.
Do you have any site-level update on the Alberta project? And is there incremental opportunity to bring a partner given North America is more attractive?
Karen said the project is progressing as planned with about 60% of CapEx spent, incentives intact, and critical labor contracts awarded. They remain open to partners but only if financially accretive and meeting return thresholds. Focus is on disciplined completion.
Why did P&SP come in below expectations despite the raised guide?
Karen and Jeff explained that the $0.15 June price decline was not incorporated, and there were planned maintenance and unplanned outages. However, II&I outperformed due to higher margins from supply disruptions and a $50M land sale, offsetting the P&SP shortfall. Self-help also over-delivered.