Dow Inc. stock research
FY2023 Q1
Dow (DOW) Gross Margin — Quarter Ended Mar 31, 2023
In the current quarter, gross profit and cost of revenue both decreased year-over-year, but the reduction in revenue was more pronounced, leading to a lower gross margin. Sequentially, gross margin improved slightly as cost of revenue edged down while revenue was unchanged.
Gross margin takeaway
Quarter ended Mar 31, 2023 · FY2023 Q1
In the current quarter, gross profit and cost of revenue both decreased year-over-year, but the reduction in revenue was more pronounced, leading to a lower gross margin. Sequentially, gross margin improved slightly as cost of revenue edged down while revenue was unchanged.
- The strongest observable margin driver is the larger proportional decline in revenue relative to cost of revenue, which compressed the gross margin. The filing notes that in the Packaging & Specialty Plastics segment, net sales decreased, with changes attributed to local price and product mix, currency, and volume.
- Compared to the immediately preceding quarter, gross margin improved marginally as overall revenue was stable and cost of revenue was slightly lower. Compared to the same quarter one year earlier, gross margin weakened significantly, with revenue declining more than cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
10.3%
Gross profit
$1.2B
Revenue
$11.9B
Cost of revenue
$10.6B
Quarter-over-quarter change
n/a
Year-over-year change
-8.4 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $11.9B | $1.2B | $10.6B | 10.3% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Previous quarter unavailable
n/a
Year-over-year change
Mar 31, 2022
-8.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the larger proportional decline in revenue relative to cost of revenue, which compressed the gross margin. The filing notes that in the Packaging & Specialty Plastics segment, net sales decreased, with changes attributed to local price and product mix, currency, and volume.
Compared to the immediately preceding quarter, gross margin improved marginally as overall revenue was stable and cost of revenue was slightly lower. Compared to the same quarter one year earlier, gross margin weakened significantly, with revenue declining more than cost of revenue.
Monitor the trajectory of local price and product mix in the Packaging & Specialty Plastics segment, as the filing indicates these factors significantly contributed to the year-over-year revenue decline.