A maker of the plastics, silicones, and specialty chemicals found in everything from food packaging to phone cases to building materials, Dow Inc. began in 1897 when chemist Herbert Dow started pulling bromine from the brine beneath Midland, Michigan. Today one of the world's largest chemical producers, it serves those markets through businesses like Packaging & Specialty Plastics. Fun fact: its Saran Wrap film began in 1933 when a lab worker found an unscrubbable, waterproof residue in a beaker and nicknamed it 'eonite.'
Dow swings to a $721M profit as a 20% price increase reverses a year of losses, but the top-line increase masks a 1% volume decline.
Dow returned to profitability after five consecutive quarters of net losses. rose 20% to $12.1 billion and was $721 million, driven by a 20% increase in local price that more than offset a 1% volume decline. The pricing recovery is underway, but demand has yet to follow.
Key takeaways
was $721 million, a swing from an $835 million loss a year ago, as a 20% increase in local price across all segments reversed the that defined 2025.
rose 20% to $12.1 billion, entirely from higher pricing; volume declined 1%, with weakness in Asia Pacific and EMEAI partially offset by gains in Latin America and the U.S. & Canada.
Packaging & Specialty Plastics, the largest , saw rise to $1,278 million from $71 million a year ago, driven by higher selling prices and self-help initiatives.
Section summaries
Management's Discussion and Analysis
Q2 2026 net sales rose 20% to $12.1B on 20% higher local price, driving net income of $721M vs. a $835M loss a year ago.
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increased 20% to $12.1B, driven by a 20% increase in across all segments, led by Packaging & Specialty Plastics up 30%.
Industrial Intermediates & Infrastructure swung to a $246 million profit from a $185 million loss a year ago, also on higher prices and cost actions.
for the first half was $2,448 million, a turnaround from a $366 million use of cash in the prior-year period, aided by the pricing recovery and a $1.0 billion legal judgment receipt in Q1.
expenses rose to $535 million from $347 million, primarily due to costs to achieve the Transform to Outperform program and higher performance-based compensation.
What changed
The 20% local price increase reverses the 7-8% price declines that persisted through all of 2025, answering the question of whether pricing would stabilize; it did more than stabilize, rising sharply.
The $721 million breaks a streak of five consecutive quarterly losses, confirming that the cost-cutting and restructuring programs are gaining traction as pricing recovers.
The 1% volume decline, however, extends the weakness flagged in Q1 2026 and the second half of 2025, suggesting the demand floor has not yet been found.
The Transform to Outperform program, which targets at least $2 billion in near-term Operating improvement, is now contributing to results, with management expecting the impact to ramp through the remainder of 2026.
What to watch
Whether the 20% local price increase is sustainable or reflects a one-time snapback, and whether volume can return to growth alongside higher prices.
The pace of savings from the Transform to Outperform program and whether they continue to expand margins if pricing momentum fades.
The trajectory of excluding the Q1 legal judgment receipt, to assess whether the reduced and are fully covered by recurring operations.
The status of the Sadara joint venture, where was suspended in Q1 2026, and whether a future or guarantee payment materializes.
Volume declined 1% overall, with decreases in Asia Pacific and EMEAI partially offset by gains in Latin America and the U.S. & Canada.
improved significantly in Packaging & Specialty Plastics (to $1,278M from $71M) and Industrial Intermediates & Infrastructure (to $246M from a $185M loss), driven by higher selling prices and self-help initiatives.
SG&A expenses rose to $535M from $347M, primarily due to costs to achieve the Transform to Outperform program and higher performance-based compensation.
Cash provided by operating activities from continuing operations was $2,448M for the first half of 2026, a substantial turnaround from a $366M use of cash in the prior-year period.
The Company expects the impact of its Transform to Outperform program to ramp significantly through the remainder of 2026 and into 2027, targeting at least $2B in near-term improvement.
Quantitative and Qualitative Disclosures About Market Risk
See Note 18 to the Consolidated Financial Statements and Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in the combined Dow Inc. and TDCC Annual Report on Form 10-K for the year ended December 31, 2025, for information on the Company's utilization o…
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See Note 18 to the Consolidated Financial Statements and Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in the combined Dow Inc. and TDCC Annual Report on Form 10-K for the year ended December 31, 2025, for information on the Company's utilization of financial instruments and an analysis of the sensitivity of these instruments.