Dow expects strong sales as higher prices power beat
The Dow Chemical brand is displayed on a board above the ground of the New York Inventory Alternate shortly after the opening bell in New York, U.S. on December 22, 2015. REUTERS/Lucas Jackson/File Picture
Oct 21(Reuters) – Dow Inc on Thursday forecast better-than-expected income for the fourth quarter after beating estimates on greater costs throughout its enterprise following a rebound in financial exercise and tight provides after Hurricane Ida.
Demand for the corporate’s chemical compounds, utilized in every thing from plastic and meals packaging to textiles, electronics and paints, has bounced again as industrial and automotive exercise recovers from pandemic lows.
In the meantime, Hurricane Ida, which lashed the U.S. Gulf Coast in August, compelled Dow and different chemical makers to close some operations, tightening already low provides and boosting costs.
“We proceed to see strong end-market demand that’s anticipated to increase into 2022, coupled with near-term logistics constraints and low stock ranges”, Chief Govt Officer Jim Fitterling mentioned in a press release.
Dow forecast fourth-quarter web gross sales of between $14 billion and $14.5 billion, above estimates of $13.53 billion, in response to Refinitiv IBES knowledge.
Nonetheless, the corporate warned web gross sales in its packaging and specialty plastics, coatings, in addition to industrials unit, to be flat to down 3%, from the third quarter, attributable to greater uncooked supplies and power prices, in addition to logistics constraints.
General costs climbed 50% within the third quarter from a yr earlier, whereas quantity rose 2%, Dow mentioned on Thursday
The corporate’s shares had been up 1.5% at $60.82 in premarket buying and selling, set so as to add to the about 8% acquire thus far this yr.
Internet working revenue, which excludes sure gadgets, rose to $2.07 billion, or $2.75 per share, within the three months ended Sept. 30, from $376 million, or 50 cents per share, a yr earlier. Analysts had estimated earnings of $2.55 per share.
Internet gross sales of $14.84 billion was above estimates of $14.28 billion.
Reporting by Rithika Krishna in Bengaluru; Modifying by Sriraj Kalluvila
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