Dow Inc forecast third-quarter core profit slightly above Wall Street expectations, while warning that the quarter ahead remains difficult to predict as the U.S.-Iran conflict continues to create uncertainty across several end markets.Shares of the chemicals maker rose 2.2% in morning trading.The near shutdown of the Strait of Hormuz, a key transit route, disrupted oil and petrochemical flows, tightening global chemicals supply and increasing prices of plastics and polymers.Dow said in April the conflict could delay or cancel expansion plans while increasing pressure to rationalize capacity as companies reassess investments amid heightened uncertainty and supply chain disruptions.The company has been reviewing non-producing assets across its portfolio, including power and steam facilities and pipelines, as the chemical industry grapples with higher feedstock and energy costs amid weak demand in key markets.CEO Karen Carter said the company expects to generate about $200 million in additional benefits from the "Transform to Outperform" program this year, taking potential gains to more than $1.3 billion for the year.Dow forecast current-quarter core earnings of about $1.75 billion, slightly above analysts' average estimate of $1.74 billion, according to data compiled by LSEG.It said the third quarter is expected to reflect the impact of lower prices in the Americas, following pricing declines in June, higher maintenance at its U.S. Gulf Coast assets and normal seasonal weakness in coatings and construction markets.These pressures are expected to be partly offset by its cost-cutting program, which should provide about $130 million in core profit support.Quarterly net sales from its packaging and specialty plastics segment rose 27% to $6.4 billion from a year earlier, driven by higher polyethylene prices.The Michigan-based company reported an adjusted profit of $1.44 per share for the quarter ended June 30, beating analysts' average estimate of $1.28 per share.(Reporting by Pooja Menon in Bengaluru; Editing by Joyjeet Das and Sriraj Kalluvila)
Dow forecasts quarterly core profit slightly above estimates, warns of Middle East uncertainty
Dow Inc predicts that its third-quarter core profit will surpass Wall Street's forecasts, bolstered by effective cost-cutting strategies. Although there may be challenges like pricing declines and seasonal slowdowns, the company noted strong sales growth in its packaging and specialty plastics segment. Notably, shares of the chemicals manufacturer experienced an uptick during morning trading.
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