By Alison Sider and Tess Stynes 

Dow Chemical Co.'s efforts to cut costs and focus on core businesses helped drive a 65% increase in first-quarter profit, the company said Wednesday.

The Midland, Mich., company's profit of $1.05 billion, or 79 cents a share, on revenue of $14.46 billion exceeded market expectations. Analysts polled by Thomson Reuters expected a per-share profit of 71 cents on revenue of $14.72 billion. Last year, Dow's first-quarter profit was $635 million, or 46 cents a share, including the impact of restructuring-related effects and debt-extinguishment charges. Without that, last year's adjusted earnings were 69 cents a share.

The company said it boosted profit margins across the board despite North America's winter weather problems, a $300 million increase in the cost of energy feedstocks such as natural gas, and a sluggish economic recovery. Sales growth in the first quarter was led by Dow's performance plastics segment, which rose 6% on an adjusted basis, thanks to price increases. Research-and-development expenses fell by 10% in the period while gross margins inched higher to 18.9% from 18.6%.

Dow Chairman and Chief Executive Andrew N. Liveris said in an interview that the company is pivoting away from businesses exposed to volatile and unpredictable swings in commodity prices and will jettison smaller businesses that don't fit into Dow's growth plans.

"Instead of deep and wide, we're going deeper and narrower," Mr. Liveris said.

Dow plans to shed between $4.5 billion and $6 billion in assets during 2014 and 2015 as it refocuses on higher-margin businesses instead of commodity chemicals. Chemical-production units are for sale, including plants that create chlorine and epoxy.

The improved results signal that Dow's efforts to restructure itself are paying off, Macquarie Capital Inc. analyst Cooley May said in a note to clients.

Investors reacted favorably to the earnings news this morning, driving Dow's stock price up 2% to $49.97 a share.

It is uncertain whether the company's efforts will satisfy activist investor Daniel Loeb of Third Point LLC, who has been pushing Dow to go even further and split off its petrochemicals business from segments that make specialty chemicals for agriculture, food, pharmaceuticals and electronics. Dow maintains that breaking up the company would hurt overall operations and shareholder value.

"We've had very positive interactions with Third Point. We've educated each other both ways," Mr. Liveris said. "Hopefully they stay an investor for the right reasons."

Third Point couldn't immediately be reached for comment.

Write to Alison Sider at alison.sider@wsj.com and Tess Stynes at tess.stynes@wsj.com

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