Dow Chemical Co posted lower-than-expected quarterly profit on Tuesday as three plant outages offset a jump in sales across all units and regions, sending shares of the biggest U.S. chemical producer down 3.6 percent in premarket trading.

Maintenance, safety training and lag time to increase operating rates at the three plants hurt profit by 7 cents per share and revenue by $300 million.

Many of the plants had been operating at low levels during the recession and needed the extra time to ramp up production, a slow process, Dow said.

For example, Dow's largest polyethlyene plant in Latin America was closed for 30 days, roughly a third of the quarter.

In a positive sign, Dow said its advanced materials unit, which hold assets from the legacy Rohm & Haas and is comprised of two reporting units, saw sales jump 13.6 percent to $2.73 billion.

Dow hopes to boost annual sales at the unit to $16 billion by 2015.

We remain focused on realizing the full potential of our new portfolio and lean cost structure, Chief Executive Andrew Liveris said in a statement. We continue to have confidence that momentum is gradually building, and we have not changed our view of a sustained global recovery led by Asia, slowly helped by the U.S. recovery, but with Europe lagging.

However, Liveris added: Our U.S. macroeconomic view remains guardedly optimistic.


Dow reported net income of $566 million, or 50 cents per share, compared with a year-earlier loss of $486 million or 47 cents per share.

Excluding one-time items, earnings were 54 cents per share. By that measure, analysts expected 56 cents, according to Thomson Reuters I/B/E/S.

Revenue rose 20.3 percent to $13.62 billion. Analysts expected $13.69 billion.

Like the first quarter, Dow's basic plastics unit posted strong results, with sales up 26.2 percent. The unit's products go into a wide range of consumer goods, including diapers.

Dow has been trying to spin the unit off into a joint venture as part of it's asset-light strategy to focus more on high-margin specialty chemicals.

The basic chemicals unit, which makes chlorine, one of the most mass-produced chemicals in the world, saw sales rise 25 percent.

Dow cut its long-term debt, much of which came from the Rohm & Haas buyout, by 5.5 percent to $18.11 billion.

Earnings from joint ventures, including the Dow Corning business with Corning Inc , doubled to $244 million.

During the period Dow sold its Styron basic plastics unit to a private equity firm.

Last month the Midland, Michigan-based company said it would become a global sponsor of the Olympics, a move it hopes will boost its standing with the public and net more than a $1 billion in revenue over the next 10 years.

Dow also announced a licensing deal with Monsanto Co, whereby Dow's agricultural unit will use Monsanto's Roundup Ready 2 Yield herbicide trait in its genetically modified soybeans.

During the quarter, Dow shareholders rejected a say-on-pay proposal, despite having approved a similar measure last year.

Shares of the company fell $1.01, or 3.6 percent, to $27.32 in premarket trading. The stock has traded between $19.75 and $32.05 in the past 52 weeks.

(Reporting by Ernest Scheyder; Editing by Lisa Von Ahn, Dave Zimmerman)