Final hours! Save up to 55% OFF InvestingProCLAIM SALE

Dow expects strong sales as higher prices power beat

Published 10/21/2021, 06:09 AM
Updated 10/21/2021, 08:36 AM
© Reuters. FILE PHOTO: The Dow Chemical logo is displayed on a board above the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S. on December 22, 2015. REUTERS/Lucas Jackson/File Photo

(Reuters) -Dow Inc on Thursday forecast better-than-expected revenue for the fourth quarter after beating estimates on higher prices across its business following a rebound in economic activity and tight supplies after Hurricane Ida.

Demand for the company's chemicals, used in everything from plastic and food packaging to textiles, electronics and paints, has bounced back as industrial and automotive activity recovers from pandemic lows.

Meanwhile, Hurricane Ida, which lashed the U.S. Gulf Coast in August, forced Dow and other chemical makers to shut some operations, tightening already low supplies and boosting prices.

"We continue to see robust end-market demand that is expected to extend into 2022, coupled with near-term logistics constraints and low inventory levels", Chief Executive Officer Jim Fitterling said in a statement.

Dow forecast fourth-quarter net sales of between $14 billion and $14.5 billion, above estimates of $13.53 billion, according to Refinitiv IBES data.

Still, the company warned net sales in its packaging and specialty plastics, coatings, as well as industrials unit, to be flat to down 3%, from the third quarter, due to higher raw materials and energy costs, as well as logistics constraints.

Overall prices climbed 50% in the third quarter from a year earlier, while volume rose 2%, Dow said on Thursday

The company's shares were up 1.5% at $60.82 in premarket trading, set to add to the about 8% gain so far this year.

© Reuters. FILE PHOTO: The Dow Chemical logo is displayed on a board above the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S. on December 22, 2015. REUTERS/Lucas Jackson/File Photo

Net operating income, which excludes certain items, rose to $2.07 billion, or $2.75 per share, in the three months ended Sept. 30, from $376 million, or 50 cents per share, a year earlier. Analysts had estimated earnings of $2.55 per share.

Net sales of $14.84 billion was above estimates of $14.28 billion.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.