Oct 21(Reuters) – Dow Inc (DOW.N) on Thursday forecast better-than-expected revenue for the fourth quarter after beating estimates on higher prices across its business following a rebound in economic activity and tight supplies after Hurricane Ida.
Demand for the company’s chemicals, used in everything from plastic and food packaging to textiles, electronics and paints, has bounced back as industrial and automotive activity recovers from pandemic lows.
Meanwhile, Hurricane Ida, which lashed the U.S. Gulf Coast in August, forced Dow and other chemical makers to shut some operations, tightening already low supplies and boosting prices.
“We continue to see robust end-market demand that is expected to extend into 2022, coupled with near-term logistics constraints and low inventory levels”, Chief Executive Officer Jim Fitterling said in a statement.
Dow forecast fourth-quarter net sales of between $14 billion and $14.5 billion, above estimates of $13.53 billion, according to Refinitiv IBES data.
Still, the company warned net sales in its packaging and specialty plastics, coatings, as well as industrials unit, to be flat to down 3%, from the third quarter, due to higher raw materials and energy costs, as well as logistics constraints.
Overall prices climbed 50% in the third quarter from a year earlier, while volume rose 2%, Dow said on Thursday
The company’s shares were up 1.5% at $60.82 in premarket trading, set to add to the about 8% gain so far this year.
Net operating income, which excludes certain items, rose to $2.07 billion, or $2.75 per share, in the three months ended Sept. 30, from $376 million, or 50 cents per share, a year earlier. Analysts had estimated earnings of $2.55 per share.
Net sales of $14.84 billion was above estimates of $14.28 billion.
Reporting by Rithika Krishna in Bengaluru; Editing by Sriraj Kalluvila
Our Standards: The Thomson Reuters Trust Principles.