(Reuters) – Chemicals company Dow Corp reported second-quarter profit that fell short of expectations on Thursday, hurt by falling prices and demand in key markets such as Asia and Europe.
Manufacturing activity in the eurozone and China weakened over the quarter, with Chinese economic data for June showing signs of raw material inventories in contraction territory.
This led to a 4% drop in local prices of Dow products in major markets.
Dow produces a broad range of chemicals and additives that are used in the manufacture of a variety of finished products in the consumer, agricultural and energy industries.
The company’s net sales fell 4% to $10.92 billion in the reported quarter, compared with estimates of $11 billion, according to LSEG data.
“The pace of the global macroeconomic recovery has been slower than expected. We remain focused on working capital, reducing costs and adapting our operating rates to current demand,” said Chief Executive Jim Fitterling.
The company’s shares were down 4.4% in premarket trading.
Analysts at RBC Capital Markets said earlier this month that while the company had completed destocking, demand remained weak, particularly in Europe.
“While near-term demand in many of the markets we serve is growing, the building and construction and consumer durables sectors are not expected to see significant changes in 2024,” the CEO added.
The Midland, Michigan-based company reported operating profit per share of 68 cents for the quarter ended June 30, compared with analysts’ average estimate of 72 cents, according to LSEG data.
(Reporting by Seher Dareen in Bangalore; Editing by Shinjini Ganguli)
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