Dow Chemical Co.'s (DOW) fourth-quarter income plummeted 87%, weighed down by an income-tax related charge and a tough comparison from a year-earlier quarter when earnings nearly tripled on stronger demand.

The chemical company's shares were down 3.4% in premarket trading at $32.80 as results missed market expectations. As of Wednesday's close, the stock was up 21% over the past three months.

Dow, the largest U.S. chemicals company by revenue, has had soaring income during recent quarters as it continues to shift away from business in lower-margin commodities. Stronger demand in emerging markets and price increases also helped the company, which makes chemicals used in items ranging from diapers to auto industry products.

In November, the company officially formed a joint venture named Sadara Chemical Co. with Saudi Arabian Oil Co. The Saudi company is more widely known as Saudi Aramco. The venture plans to build and operate one of the world's largest chemical plants on Saudi Arabia's Persian Gulf coast. Production is expected to begin in 2015, and all units should be up and running by 2016.

Dow reported a profit of $65 million, down from $511 million. On a per-share basis, there was a loss of 2 cents in the latest quarter compared with a profit of 37 cents, when factoring in preferred dividends. The latest period included the recognition of a valuation allowance in Brazil that increased income taxes by the equivalent of 23 cents a share. Excluding that cost and other items, earnings fell to 25 cents from 47 cents a share. Net sales improved 2.3% to $14.1 billion.

Analysts polled by Thomson Reuters most recently predicted earnings of 30 cents a share on revenue of $14.19 billion.

Gross margin narrowed to 11.8% from 14.2%.

Volume fell 3%, but was flat excluding divestitures. Volume in emerging markets was up 7%, led by China, which was up 12%. Prices were up 5%, more than offsetting higher purchased feedstock and energy costs. Sales in emerging markets reached a new quarterly record, the company said, and rose 10%, excluding divestitures.

Performance materials division sales grew 4.3%, as performance plastics saw 5.7% lower sales. Sales in feedstock and energy rose 14%.