Prices jumped 14% in the first quarter from the fourth, helped by gains in consumer packaging and polyurethanes, or flexible foam, commonly used in furniture and bedding, as the supply squeeze came amid demand recovery in some of the company’s end-markets.
The company forecast second-quarter sales between $12.4 billion and $12.9 billion, compared with analysts’ average estimate of $11.25 billion, citing a recovery from winter storm Uri and robust demand.
“Despite supply constraints, we saw demand growth as the economic recovery continued to broaden, most notably in packaging, construction, mobility, electronics and consumer durables end-markets,” Chief Executive Officer Jim Fitterling said in a statement.
A deep freeze in Texas in mid-February hit supplies of raw materials and forced several chemical plants along the U.S. Gulf Coast, including those owned by Dow, to halt their operations, hitting production.
Volumes in some of Dow’s units were impacted by supply constraints related to the storm.
Dow said it brought the operations back online within a week and reached pre-storm operating rates by the end of the quarter.
The company’s net operating income, which excludes certain items, jumped 69% to $1.02 billion, or $1.36 per share, in the three months ended March 31, from the fourth quarter.
Analysts had estimated earnings of $1.14 per share, according to Refinitiv IBES data.
Net sales rose 11% to $11.88 billion, well ahead of analysts’ estimate of $11.09 billion.
(Reporting by Arathy S Nair in Bengaluru; Editing By Anil D’Silva and Sriraj Kalluvila)
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