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Dow Chemical, the US group that is in the midst of a $150bn merger with rival DuPont, reported earnings for the first quarter that easily came in ahead of analysts expectations, sending shares higher in pre-market trading.

For the three months to the end of March, sales rose nearly 24 per cent to $13.2bn, compared to the year ago period, thanks to the addition of Dow Corning, the silicone business it took full control of last June. Excluding this transaction, sales rose 11 per cent during the quarter with increases across all geographic areas.

Revenue topped market estimates of $12.5bn. Adjusted net income, up 28 per cent at $1.27bn, or $1.04 per operating share, was exceeded projections of $1.2bn or 98.5 cents a share.

Andrew Liveris, Dow’s chief executive, was heavily criticised by activist investor Third Point for failing to hit earnings targets, but cost cuts have started to improve the company’s performance as it moves towards the merger with DuPont.

“The global economy is showing signs of positive momentum, with excellent leading indicators across much of the world – though geopolitical risks and volatility will persist,” said Mr Liveris. “The United States remains a bright spot, driven by solid consumer demand and a resurgent manufacturing sector, especially with the pro-business investment policies from the new administration.

Over the past 12 months, Dow’s shares have risen by 22 per cent, compared to a 14 per cent rise for the S&P 500 index.

They jumped 1.4 per cent in pre-market trading.

Copyright The Financial Times Limited 2017. All rights reserved.
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