(Reuters) – Dow Chemical Co said on Thursday it missed second-quarter earnings expectations, hurt by lower prices and demand in key markets including Asia and Europe.
Manufacturing activity in the eurozone and China declined during the quarter, with Chinese economic data in June showing raw material stocks in contraction territory.
This resulted in a 4% decline in domestic prices of Dow products in key markets.
Dow produces a broad range of chemicals and additives that are used in the manufacture of a variety of end products in the consumer, agricultural and energy sectors.
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,” said CEO Jim Fitterling. “We continue to focus on working capital, reducing costs, and aligning our operating rates with current demand.”
The company’s shares fell 4.4% in pre-market trading.
While the company has finished reducing its inventories, demand remains weak, particularly in Europe, analysts at RBC Capital Markets said earlier this month.
“While near-term demand is growing in many of the markets we serve, the construction and consumer durables sector is unlikely to change significantly in 2024,” the CEO added.
The Midland, Michigan-based company reported operating earnings 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 Sahar Dareen in Bengaluru; Editing by Shinjini Ganguly)