Dow Chemical Cites Write-Offs as Profits Fall

Dow Chemical on Thursday reported a $314-million loss for the fourth quarter of 1985, citing personnel cutbacks and asset write-offs that cut into its profits, and said its annual earnings also nose-dived.

The loss in the three months ended Dec. 31 compared to a profit of $85 million in the fourth quarter of 1984, the Midland, Mich.-based company said. Dow’s fourth-quarter sales totaled $2.9 billion, up 8% from $2.7 billion in the year-ago period.

During the quarter, Dow shaved $592 million from its books, partly by reducing the value of assets concentrated in its basic chemicals and plastics businesses, mainly in the United States. The company said $121 million of the pretax charge came from the cost of reducing its work force by 2,700 worldwide.

“Dow’s basic chemicals and plastics businesses have not recovered to satisfactory levels despite improvements in the U.S. and other economies in the last three years,” said Paul F. Oreffice, Dow president and chief executive. “As a result of this program, however, we expect significant near-term profit improvement in these businesses.”

For the year, Dow reported a profit of $58 million, down 90% from $560 million in 1984. Sales in 1985 totaled $11.5 billion, up 1% from $11.4 billion in 1984.