By Swetha Gopinath

By Swetha Gopinath

(Reuters) - Dow Chemical Co <DOW.N> reported a better-than-expected quarterly profit as lower costs helped boost margins and the company indicated that it would exceed its cost-cutting target for the year.

The company said on Thursday that it had realized $90 million of its full-year cost savings target of $300 million in the second quarter.

It would be "reasonable to assume" that Dow will exceed its cost-savings target for the year, Chief Financial Officer Howard Ungerleider said in an interview.


Dow and DuPont <DD.N>, who are expected to close their $130 billion merger this year, have been slashing costs by laying off employees and keeping a tight lid on expenses.

The merger is being scrutinized by regulators in the United States and Europe, and the companies have offered concessions in a bid to allay EU antitrust concerns

"We remain really good on our timeline to close the transaction before the end of the year," said Ungerleider.

"No discussion we have had with the European Commission takes us off of that view."

Dow's second-quarter operating margin expanded by 160 basis points to 21 percent on an earnings before interest, taxes, depreciation and amortization (EBITDA) basis.

The company's strategy of focusing on high-margin products by shedding volatile commodity businesses such as its century-old chlorine business are also paying off.

EBITDA at the company's Consumer Solutions and Infrastructure Solutions units surged in the quarter ended June 30, helped by Dow taking full control of Dow Corning, its venture with Gorilla glass maker Corning Inc <GLW.N>.

The company's plastics unit reported 12 percent volume growth, and demand continues to be strong, with supply growth being restricted as polyethylene projects get delayed or pushed out, executives said on a post-earnings call.

"Dow's continued ability to deliver above-GDP growth despite macro uncertainty highlights renewed focus on cost, and strong consumer-driven portfolio," Nomura analysts wrote in a note.

DuPont also reported a higher-than-expected quarterly profit on Tuesday, and forecast a 50 percent jump in third-quarter operating earnings as it steps up cost cutting.

Dow's net income attributable to shareholders nearly tripled to $3.12 billion, or $2.61 per share, in the quarter.

Excluding gain related to the Dow Corning deal, the company earned 95 cents per share, much higher than the average analyst estimate of 85 cents, according to Thomson Reuters I/B/E/S.

Sales fell 7.4 percent to $11.95 billion, but beat the average estimate of $11.24 billion.

The company's shares were nearly unchanged at $53.90 in morning trade on the New York Stock Exchange.

(Reporting by Swetha Gopinath in Bengaluru; Editing by Kirti Pandey and Sriraj Kalluvila)

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