Dow Falls Short of Profit Estimates Due to Decreased Demand in Asia and Europe

Dow Inc. (DOW.N) missed second-quarter profit estimates on Thursday due to lower prices and reduced demand in key markets, including Asia and Europe, leading to a 5% drop in the chemical maker's shares during premarket trading.

A decline in manufacturing activity in both the euro zone and China contributed to a 4% decrease in local prices for Dow's products in these crucial markets. The company produces a wide range of chemicals and additives used in manufacturing various end-products in the consumer, agricultural, and energy sectors.

"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 to 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 added.

Dow forecasts third-quarter sales of approximately $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 noted earlier this month that although the company had finished destocking, demand remained weak, especially in Europe.

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