Dow misses profit estimates on lower demand in Asia, Europe By Reuters

(Reuters) -Dow missed second-quarter profit estimates on Thursday, hurt by lower prices and demand in key markets including Asia and Europe, sending shares of the chemicals maker 5% down in premarket trading.

Manufacturing activity in the euro zone and China weakened in the quarter, resulting in a 4% drop in local prices of Dow’s products in their key markets.

The company produces a vast range of chemicals and additives that are used in manufacturing a variety of end-products in the consumer, agricultural and energy sector.

“The pace of the global macroeconomic recovery has been slower than expected,” said Chief Executive Officer Jim Fitterling.

Dow’s net sales fell 4% to $10.92 billion in the reported quarter, compared with LSEG estimates of $11 billion.

“While near-term demand in many markets that we serve is growing, building & construction and consumer durables are unlikely to significantly change in 2024,” Fitterling said.

Dow expects third-quarter sales of about $11.1 billion, higher than the second quarter, but below Wall Street estimates of $11.35 billion, according to LSEG data.

Analysts at RBC Capital Markets said earlier this month that while the company was through with destocking, demand remained soft, particularly in Europe.

The Midland, Michigan-based company reported operating earnings per share of 68 cents for the quarter ended June 30, compared with the average analyst estimate of 72 cents, according to LSEG data.