Dow, which is rated as the largest among US chemical makers in terms of sales volume, the Michigan-based company is also among several companies that faced allegations of overcharging clients through collusion in setting the price of polyurethane foam that finds application in cars, packaging, and household items like mattresses and furniture upholstery.
Earlier, several customers had opted out of a class-action suit to enlarge the scope of the wrongdoing. Though the opt-out cases were nearly identical to the class action itself, it had sought to expand the time frame of the allegation of price fixing from a mere 4 years beginning 2003 for nearly two decades beginning 1994.
Previously Dow Chemical had agreed to settle the class-action suit by paying $835 million and had dropped its plans to appeal to the Supreme Court consequent to the death of Justice Antonin Scalia.
The opt-out claims were being consolidated in New Jersey, and a jury trial was to begin last month. However, a federal judge dismissed the suit on Tuesday citing the $400 million out of court settlement reached by Dow.
In Canada, two separate cases are pending against the company though they are related to this case.
On Wednesday, Dow released a statement saying that it had not colluded with competitors to fix polyurethane prices and stated further that after assessing the risk and potential outcomes, the company believed that the present settlement was a right decision in the interest of the company and its shareholders.
Meantime the settlement now reached by Dow with its customers does not have impacted the company’s share prices. The financial health of the company appeared robust with an EPS of $0.93 for the current quarter against $0.70 which was expected by the street. Revenue for the company stood at $11462.00 million for the current quarter against $11169.48 which was expected by analysts. However, the revenue was down by about 20% compared to the same period in the previous year.
Though the company’s shares are presently around the $50 mark, most analysts are positive on the future trajectory and are targeting $56 to a share. On 24th March, Credit Suisse had also upgraded the share to “Outperform”.