Dow Cotton Gets EU Approval - Analyst Blog
January 04 2012 - 3:30AM
Zacks
Recently, the European Union
approved Dow Chemical Co.'s (DOW) biotech cotton
variety and Syngenta AG’s three genetically modified corn
varieties, for food and feed use, import and processing.
The crops were approved by the
European Commission, the EU's regulatory arm, after member states
failed to provide a qualified majority either in favor or against
the approvals.
According to the Commission, the authorizations are valid for 10
years and will be subject to the EU's labelling and traceability
rules. The approvals do not allow cultivation of crops in the
27-nation bloc.
The approved Syngenta corns are
MIR604 x GA 21, Bt11 x MIR604 and Bt11 x MIR604 x GA21, all of
which combine insect-resistant traits with herbicide tolerance. The
Dow cotton variety authorized by the commission is 281-24-236 x
3006-210-23, which has insect resistance built in.
In October 2011, Dow earned 69
cents per share in the third quarter of 2011, ahead of the Zacks
Consensus Estimate of 64 cents as well as last year’s 45 cents.
However, including one-time charges, the company earned 62 cents
per share compared with 54 cents in the year-ago quarter.
Quarterly revenues jumped 17% year
over year to $15.1 billion and were above the Zacks Consensus
Estimate of $14.7 billion, driven by double-digit gains in all its
operating segments and geographic areas, with the largest growth in
Latin America (21%) and Europe, Middle East and Africa (EMEA)
(19%). In the emerging geographies, sales reached $5 billion, a new
quarterly record for the company.
Dow did not provide any financial
guidance. However, the company expects demand to improve further,
especially in Asia with the global economic recovery. The US and
European markets have also started showing signs of improvement.
Dow is also optimistic on major consumer-markets, including
electronics, coatings, automotive and packaging. However,
construction markets are expected to remain weak.
DOW faces stiff competition from
EI DuPont de Nemours & Co. (DD).
Currently, Dow has a short-term (1
to 3 months) Zacks #4 Rank (Sell) and a long- term Neutral
recommendation.
DU PONT (EI) DE (DD): Free Stock Analysis Report
DOW CHEMICAL (DOW): Free Stock Analysis Report
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