By Euan Rocha

Net income in the quarter was $32 million, or 17 cents a share, compared with a year-ago profit of $180 million, or 91 cents a share.

Excluding items, the company posted earnings of 69 cents a share, down from 90 cents a share, a year earlier. Analysts, on average, had forecast earnings of 63 cents a share, according to Reuters Estimates.

Dow, in July, agreed to acquire rival Rohm and Haas for $15.3 billion, in a bid to expand its specialty chemicals business.

But last month Dow said it would not close the deal on schedule in light of deteriorating economic conditions and the failure of a key joint venture -- the proceeds of which were to fund the Rohm and Haas deal.

Rohm and Haas has sued Dow in a bid to force the largest U.S. chemical maker to close the deal.

The company has said it will not host an earnings conference call to discuss the results.

Rohm and Haas saw quarterly sales decline 13 percent to $2.03 billion with sales in developing economies falling as much as 16 percent.

Chemical makers around the globe have been hit by the widening recession in developed economies. But results have also been weighed down by the slowdown in developing economies that until recently were large growth drivers for the sector.

Rohm and Haas' salt business was the one segment that posted a year-over-year improvement in sales and income, as harsh winter conditions in North America boosted demand for salt.

DEAL IN PERIL

On Sunday, Rohm and Haas rejected a possible meeting with top Dow executives to talk about a way forward for their stalled merger, but suggested that the companies' financial advisers should meet.

Dow refused to close its takeover of Rohm and Haas late last month, after a key joint venture with Kuwait fell apart. Dow had intended to use proceeds from that transaction -- a $17.4 billion plastics joint venture -- to help fund the Rohm deal.

Rohm and Haas sued Dow, arguing that the chemical company has no legal basis to walk away from the deal and asking a Delaware court to order it to complete the transaction. A trial on the matter is scheduled to start on March 9.

Rohm and Haas shares were down 1.4 percent at $55.72 in trade before the morning bell.

(Reporting by Euan Rocha, editing by Dave Zimmerman )