Dow beats profit estimates on higher polyethylene prices, boosts savings target
Tweet
Share
E-mail
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
July 23 (Reuters) - Dow Inc beat Wall Street estimates for second-quarter adjusted profit on Thursday, helped by higher prices due to supply shocks from the Middle East conflict and cost cuts.
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 has been reviewing its non-product-producing assets across its portfolio, including power and steam production and pipelines, as the chemical industry struggles 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 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 are expected to be partly offset by its cost-cutting program, which should provide about $130 million of adjusted core profit support across its three businesses.
Quarterly net sales from Dow's packaging and specialty plastics segment rose 27% to $6.4 billion in the second quarter from a year earlier, driven by higher polyethylene prices in all regions.
Net sales at its industrial intermediates & infrastructure segment rose 14% to $3.2 billion and performance materials and coatings were up 11% to $2.4 billion.
The Michigan-based company reported an adjusted profit of $1.44 per share for the quarter ended June 30. Analysts on average had expected a profit of $1.28 per share, according to data compiled by LSEG.
(Reporting by Pooja Menon in Bengaluru; Editing by Joyjeet Das and Sriraj Kalluvila)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Myanmar leaders' return to ASEAN meetings 'still far off', bloc's envoy says
- Nasdaq tops profit estimates on high-profile listings, robust data revenue
- Chinese chipmaker CXMT to list in Shanghai on July 27 after Asia's biggest IPO this year
Create E-mail Alert Related Categories
ReutersSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
